Also as someone who is partially disabled (and waiting.. months.. on a claim from the government, still) and has trouble finding any work at all, every single dollar I could potentially gain or lose is a big thing.
Would those 5 dollar fees cause an overdraft if you didn't HAVE the five dollars? Cause I'm sure I'd have been hit by that. A lot.
Back when I was young and stupid, I overdrafted something like 70 cents. Yeah, I fucked up, I know.
Problem is they kept trying to draw the overdraft fee from my account, which made a 35.70 charge on my account (overdraft + what I didn't have) become something like $240.
So yeah, even if your account has 4.97 in funds, it could very well hurt. Which is my biggest issue. I basically have to add $5 to everything I buy.
And this is more than likely BoA trying to discourage online only banking. If I add $5 to my charges, I might as well go to their ATM. if I'm going to their ATM, I might as well go inside. If I go inside, I might as well just get the one that doesn't charge me if I talk to a real teller...
I was wrong about bank of america, specifically, that doesn't invalidate what I said: that the majority of bank fees are designed to create profit and have nothing to do with expenses.
Fuck's sake they made $38,000,000,000 in profit from overdraft fees in 2008
Businesses designing fees to create a profit? Scandalous!
Overdraft fees are probably the one fee that I can get behind lamenting. They're 99% bullshit, especially given the tricks that were commonly employed to maximize them and their sheer dollar amount. An account going from $1.70 over drawn to $300 in the hole instantly is obscene, and makes payday lenders look downright charitable in comparison.
But a $5 fee for debit card purchase use? Sounds like it's both reasonable (in amount), and linked to some real expense (even if yes, it is *GASP* designed to create a profit). And doesn't seem to be unavoidably tied to the more "essential" needs the bank fills. It's them charging a fee that makes them a tidy profit on a service you aren't forced to use. Scandalous!
Fees for failing to maintain a minimum balance are a bit trickier (as they're difficult to avoid, absent just having more money), though again they're usually little enough that I have a hard time giving a fuck. If you're poor-ish, replace one Big Mac a month with one pack of Ramen, fee paid. Or shop around for another institution that doesn't charge the fee, if you can find one.
I'm sure the 3500 hundred people they laid off in August would disagree. And the 30,000 they announced as planned mid September(WSJ predicts it'll actual be closer to 40k). And all the mortgagees who are defaulting which is what caused a lot of the loss, I'm sure they're happy about it too.
Like I said in my earlier story, they nearly bankrupted me and nearly made me homeless. It sucks for those people, but I hate BOA more than I sympathize with them.
There's no plan, there's no race to be run
The harder the rain, honey, the sweeter the sun.
I was wrong about bank of america, specifically, that doesn't invalidate what I said: that the majority of bank fees are designed to create profit and have nothing to do with expenses.
Fuck's sake they made $38,000,000,000 in profit from overdraft fees in 2008
Businesses designing fees to create a profit? Scandalous!
Overdraft fees are probably the one fee that I can get behind lamenting. They're 99% bullshit, especially given the tricks that were commonly employed to maximize them and their sheer dollar amount. An account going from $1.70 over drawn to $300 in the hole instantly is obscene, and makes payday lenders look downright charitable in comparison.
But a $5 fee for debit card purchase use? Sounds like it's both reasonable (in amount), and linked to some real expense (even if yes, it is *GASP* designed to create a profit). And doesn't seem to be unavoidably tied to the more "essential" needs the bank fills. It's them charging a fee that makes them a tidy profit on a service you aren't forced to use. Scandalous!
Fees for failing to maintain a minimum balance are a bit trickier (as they're difficult to avoid, absent just having more money), though again they're usually little enough that I have a hard time giving a fuck. If you're poor-ish, replace one Big Mac a month with one pack of Ramen, fee paid. Or shop around for another institution that doesn't charge the fee, if you can find one.
Nice goalpost shifting
The banks are raising fees because they've grown accustomed to having more profits than ever before. Seriously the last few years have been really good to the current crop of banks, less so to the ones who failed, but they failed because of blind profit motive.
Institutions that manage people's money should have a greater responsibility to their customers than that, and the government should force them to. I'm not saying they shouldn't make a profit, but what was wrong with the profits they made 10 years ago? There's no reason a business who's only goal should be to safeguard assets should be pulling in such ludicrous sums of cash, for the same reasons that health insurance companies shouldn't be pulling in ludicrous sums of cash.
Overdraft fees are probably the one fee that I can get behind lamenting. They're 99% bullshit, especially given the tricks that were commonly employed to maximize them and their sheer dollar amount. An account going from $1.70 over drawn to $300 in the hole instantly is obscene, and makes payday lenders look downright charitable in comparison.
Why, because you have a problem with *GASP* banks deciding to make a profit? The bank is, in essence, lending you the money to pay your overdraft instead of bouncing the check/refusing the charge. Oh, horrors, the bank might actually charge MORE for an overdraft than it actually costs them? Well, sorry, banks, but that's the one kind of profit that mcdermott thinks is "obscene", so knock it off!
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No because they *GASP* aren't loaning me shit. A loan implies that if I overdraft $.50, and they overdraft fee my account for $40, I could use 39.50 with the agreement that I would owe them $40.50. But if I spent even one dollar, they 'loan' another $80 out.
They are charging you a shitload of money to cover a quarter.
Oh horror or horrors the banks would never be able to operate if they had to cover a quarter overdraft with a sensible fee instead of taking money from someone clearly shown as unable to pay that huge price.
The banks are raising fees because they've grown accustomed to having more profits than ever before. Seriously the last few years have been really good to the current crop of banks, less so to the ones who failed, but they failed because of blind profit motive.
Institutions that manage people's money should have a greater responsibility to their customers than that, and the government should force them to. I'm not saying they shouldn't make a profit, but what was wrong with the profits they made 10 years ago? There's no reason a business who's only goal should be to safeguard assets should be pulling in such ludicrous sums of cash, for the same reasons that health insurance companies shouldn't be pulling in ludicrous sums of cash.
And if your argument is that banks should be non-profits or nationalized, you've got a point.
Otherwise? They're a business, like any other. And just like Starbuck's, Microsoft, or any other company on the planet they've got shareholders who want them to increase profits, not stagnate.
Also, I don't believe I ever claimed that the $5 debit fee was meant to cover only the expense of running those transactions, and was not intended to generate a profit. The goalposts were not shifted. Maybe you're thinking of another poster? I've maintained this entire time that this is a case of banks charging customers for the services they are providing, and quite obviously (again, businesses and not charities) making a tidy profit in doing so. If they could get away with charging $10, they could. And by the general principle that a business is there to make money, they should. Apparently $5 is the price they determined the market will bear.
And despite the gnashing of teeth we see here, I'll be unsurprised if they're correct. We'll see.
Overdraft fees are probably the one fee that I can get behind lamenting. They're 99% bullshit, especially given the tricks that were commonly employed to maximize them and their sheer dollar amount. An account going from $1.70 over drawn to $300 in the hole instantly is obscene, and makes payday lenders look downright charitable in comparison.
Why, because you have a problem with *GASP* banks deciding to make a profit? The bank is, in essence, lending you the money to pay your overdraft instead of bouncing the check/refusing the charge. Oh, horrors, the bank might actually charge MORE for an overdraft than it actually costs them? Well, sorry, banks, but that's the one kind of profit that mcdermott thinks is "obscene", so knock it off!
And again, I don't place charging $35 for a penny of overdraft to be on the same ethical plane as charging for a debit card. Oh, and reordering transactions to maximize those fees, rather than charging them chronologically.
Shit ain't binary, quit pretending it is. Thanks.
EDIT: I mean, if you want to say that charging $5 a month for a debit card is the same as charging $300 for $7 in overdrafts, cool. I'm going to call you a silly goose, though. Goose.
And again, I don't place charging $35 for a penny of overdraft to be on the same ethical plane as charging for a debit card. Oh, and reordering transactions to maximize those fees, rather than charging them chronologically.
Shit ain't binary, quit pretending it is. Thanks.
EDIT: I mean, if you want to say that charging $5 a month for a debit card is the same as charging $300 for $7 in overdrafts, cool. I'm going to call you a silly goose, though. Goose.
So, it's OK for a bank to charge a fee well above its actual cost of providing that service purely to increase profits, and anyone who says otherwise makes you stagger for the fainting couch. *GASP!* Unless, of course, it's a fee that you personally think is bullshit, and "mcdermott thinks it's bullshit" is an airtight, logical rebuttal to anyone who asks why an overdraft fee and a debit fee are different.
Sarcasm != logic, no matter how hard you fluff it. So please explain to me why it's wrong for a bank to charge a monthly fee, not to cover costs, but to maximize profits, if and only if that fee is not an overdraft charge. "That's bullshit" is not exactly an argument.
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And again, I don't place charging $35 for a penny of overdraft to be on the same ethical plane as charging for a debit card. Oh, and reordering transactions to maximize those fees, rather than charging them chronologically.
Shit ain't binary, quit pretending it is. Thanks.
EDIT: I mean, if you want to say that charging $5 a month for a debit card is the same as charging $300 for $7 in overdrafts, cool. I'm going to call you a silly goose, though. Goose.
So, it's OK for a bank to charge a fee well above its actual cost of providing that service purely to increase profits, and anyone who says otherwise makes you stagger for the fainting couch. *GASP!* Unless, of course, it's a fee that you personally think is bullshit, and "mcdermott thinks it's bullshit" is an airtight, logical rebuttal to anyone who asks why an overdraft fee and a debit fee are different.
Sarcasm != logic, no matter how hard you fluff it. So please explain to me why it's wrong for a bank to charge a monthly fee, not to cover costs, but to maximize profits, if and only if that fee is not an overdraft charge. "That's bullshit" is not exactly an argument.
One is charging a reasonable fee (even if profit-producing) for a reasonable service.
The other is usury. It's hard to sell overdraft "protection" as anything other than a short-term loan; when you opted in (or were forced in by the bank, back when most didn't make it optional) the bank agreed to, on demand, issue you a short term loan to cover the amount of any excess transactions. And I'm exactly as accepting of the "fees are different" argument to avoid laws regarding excessive interest in the context of banks as I am in the context of payday loans. Which is not at all. The arguments against overdraft fees are the same arguments against charging 1000% interest on a loan in any other context. Which are entirely different than the argument against a simple, affordable (regardless of how poor you are, $5 is affordable) monthly fee.
As for the reordering of transactions to maximize the number of fees drawn, I suspect I can refer you to the court ruling (against Wells Fargo, IIRC) on the matter. That is also different than a simple monthly fee.
I'd also hope that some of us aren't so ass-deep in a black-and-white world of formally logical pendantry that we can't see the difference between a $35 per transaction fee and a $5 per month fee. But mostly the above.
I can absolutely see the difference, I'd rather banks had strong profit caps though, as banks being run as a profit generating engine almost fucking annihilated our entire way of life 3 years ago.
I can absolutely see the difference, I'd rather banks had strong profit caps though, as banks being run as a profit generating engine almost fucking annihilated our entire way of life 3 years ago.
Yes, and the issues that caused that are entirely and completely separate from the issue of small, recurring fees on the consumer banking end. I'm not really buying the use of the one to attack the other.
Though yes, I agree that an argument can be made for having non-profit or state-run consumer banking programs, considering how vital they are to participation in the modern economy.
Until then, BofA is a business. I expect them to act accordingly, and as such I am neither shocked nor particularly offended over most of the fees they charge.
Back when I was young and stupid, I overdrafted something like 70 cents. Yeah, I fucked up, I know.
Problem is they kept trying to draw the overdraft fee from my account, which made a 35.70 charge on my account (overdraft + what I didn't have) become something like $240.
So yeah, even if your account has 4.97 in funds, it could very well hurt. Which is my biggest issue. I basically have to add $5 to everything I buy.
I had the same thing happen to me when I closed a bank account with Bank North after I moved back to Florida. They ended up trying to bill me for over $300 in fees for what amounted to I believe a $5 overdraft.
When I went to open a checking account down here after getting settled, I was denied because Bank North had put into the ChexSystems (basically a credit reporting agency for checking accounts) that I had "abused" my checking account.
I ended up being forced into joining my Mom's checking account, or else pay a fee every time I needed to cash a check and make out money orders to pay my bills...
So we get stiff once in a while. So we have a little fun. What’s wrong with that? This is a free country, isn’t it? I can take my panda any place I want to. And if I wanna buy it a drink, that’s my business.
Though yes, I agree that an argument can be made for having non-profit or state-run consumer banking programs, considering how vital they are to participation in the modern economy.
They are called Credit Unions, and more people should join them.
So we get stiff once in a while. So we have a little fun. What’s wrong with that? This is a free country, isn’t it? I can take my panda any place I want to. And if I wanna buy it a drink, that’s my business.
Though yes, I agree that an argument can be made for having non-profit or state-run consumer banking programs, considering how vital they are to participation in the modern economy.
They are called Credit Unions, and more people should join them.
Yep. Pretty grateful that I have family members in the military. My roommate and resident international student hates me.
Though yes, I agree that an argument can be made for having non-profit or state-run consumer banking programs, considering how vital they are to participation in the modern economy.
They are called Credit Unions, and more people should join them.
True, and all the more reason for me not to give much of a shit about these fees from BofA and others (since, you know, options).
Though as I've made clear, I'd not care all that much anyway.
I'd probably be with a credit union, if I didn't get the super-platinum-don't-pay-fees-and-get-cool-stuff account from a major bank through my employer.
I'd probably be with a credit union, if I didn't get the super-platinum-don't-pay-fees-and-get-cool-stuff account from a major bank through my employer.
Yeah, I get my choice of membership with 3 different CUs because of my employer.
So we get stiff once in a while. So we have a little fun. What’s wrong with that? This is a free country, isn’t it? I can take my panda any place I want to. And if I wanna buy it a drink, that’s my business.
One is charging a reasonable fee (even if profit-producing) for a reasonable service.
Why is it a reasonable fee? The bank is not in the red charging no fee. It is slapping on $5 for the use of your own money, not because it actually costs anywhere near that much to administer, but because $5 a month is apparently an amount that makes most people think "oh hey, that's not too bad," but generates quite a bit when generated times a bajillion customers. Plus, maybe people who are close to the margin will fuck up and forget the fee and you can charge an overdraft fee!
The other is usury. It's hard to sell overdraft "protection" as anything other than a short-term loan; when you opted in (or were forced in by the bank, back when most didn't make it optional) the bank agreed to, on demand, issue you a short term loan to cover the amount of any excess transactions. And I'm exactly as accepting of the "fees are different" argument to avoid laws regarding excessive interest in the context of banks as I am in the context of payday loans. Which is not at all. The arguments against overdraft fees are the same arguments against charging 1000% interest on a loan in any other context. Which are entirely different than the argument against a simple, affordable (regardless of how poor you are, $5 is affordable) monthly fee.
As for the reordering of transactions to maximize the number of fees drawn, I suspect I can refer you to the court ruling (against Wells Fargo, IIRC) on the matter. That is also different than a simple monthly fee.
I agree entirely on the reordering of transactions. That's complete bullshit, because it's not something the customer agrees to and which is part of the normal processing of transactions. It's a mechanism to deliberately overdraw people's accounts by the bank's actions, not the accountholder's actions.
But for overdraft fees, your argument is purely about the amount of the fee, then? It would be OK if banks only charged $10 per no-bounce, or perhaps a sliding scale depending on the amount of the overdraft? Are you really arguing that overdraft fees of any amount are usury and wrong? That sounds like some binary shit right there.
Because if the basis of your argument is 'man, it sucks if your account goes from $1.40 to negative three hundred,' would that still be your position if I wrote $150 of checks on that remaining $1.40?
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One is charging a reasonable fee (even if profit-producing) for a reasonable service.
Why is it a reasonable fee? The bank is not in the red charging no fee. It is slapping on $5 for the use of your own money, not because it actually costs anywhere near that much to administer, but because $5 a month is apparently an amount that makes most people think "oh hey, that's not too bad," but generates quite a bit when generated times a bajillion customers. Plus, maybe people who are close to the margin will fuck up and forget the fee and you can charge an overdraft fee!
The "use your money lulz" argument is bullshit. There are still other ways to use your money without incurring fees. They are charging you to use a debit card to use your money, not to use your money.
You may have an argument regarding min-balance fees, because for customers financially unable to maintain such a balance it's unavoidable. Even then, there are usually ways to avoid those fees (such as using direct deposit).
The other is usury. It's hard to sell overdraft "protection" as anything other than a short-term loan; when you opted in (or were forced in by the bank, back when most didn't make it optional) the bank agreed to, on demand, issue you a short term loan to cover the amount of any excess transactions. And I'm exactly as accepting of the "fees are different" argument to avoid laws regarding excessive interest in the context of banks as I am in the context of payday loans. Which is not at all. The arguments against overdraft fees are the same arguments against charging 1000% interest on a loan in any other context. Which are entirely different than the argument against a simple, affordable (regardless of how poor you are, $5 is affordable) monthly fee.
As for the reordering of transactions to maximize the number of fees drawn, I suspect I can refer you to the court ruling (against Wells Fargo, IIRC) on the matter. That is also different than a simple monthly fee.
I agree entirely on the reordering of transactions. That's complete bullshit, because it's not something the customer agrees to and which is part of the normal processing of transactions. It's a mechanism to deliberately overdraw people's accounts by the bank's actions, not the accountholder's actions.
Actually, it was in general written into customer agreements, and I believe notifications were sent out to existing customers. It's a practice so abusive, however, that I'd argue that even with notice it is unacceptable. It's an entirely unconscionable business practice.
But for overdraft fees, your argument is purely about the amount of the fee, then? It would be OK if banks only charged $10 per no-bounce, or perhaps a sliding scale depending on the amount of the overdraft? Are you really arguing that overdraft fees of any amount are usury and wrong? That sounds like some binary shit right there.
Because if the basis of your argument is 'man, it sucks if your account goes from $1.40 to negative three hundred,' would that still be your position if I wrote $150 of checks on that remaining $1.40?
Of course it's the amount of the fee. I thought that was absolutely clear from my post. See those words "excessive interest?" That implies that some amount of "interest" would not be "excessive," no?
EDIT: And yes, I think that a sliding amount based on the amount of the overdraft is a superb idea. If I overdraft by $1000 it should cost more than if I overdraft by $1.25.
I will say sometimes its not just the financial institution, but the merchant that fucks people over. I saw one place run the same ACH through 8 times over 2 days since it kept being declined as insufficient funds.
The "use your money lulz" argument is bullshit. There are still other ways to use your money without incurring fees. They are charging you to use a debit card to use your money, not to use your money.
You may have an argument regarding min-balance fees, because for customers financially unable to maintain such a balance it's unavoidable. Even then, there are usually ways to avoid those fees (such as using direct deposit).
Why is it the bank's problem if you can't keep enough money in the bank? Isn't that right back to the ol' "it costs us this much to administer your money" argument? As for debit cards, you can make that argument about any random fee. Oh no, it's not that they're trying to profit off you accessing your money, it's that they just have a fee for THIS way of accessing your money.
Actually, it was in general written into customer agreements, and I believe notifications were sent out to existing customers. It's a practice so abusive, however, that I'd argue that even with notice it is unacceptable. It's an entirely unconscionable business practice.
I'm pretty sure that it was not specifically written into customer agreements that WF would deliberately process transactions out of chronological order so that they could pile up overdraft fees. Vague all-encompassing legalese in 4-point type is not really the same as notifying your customers.
Of course it's the amount of the fee. I thought that was absolutely clear from my post. See those words "excessive interest?" That implies that some amount of "interest" would not be "excessive," no?
EDIT: And yes, I think that a sliding amount based on the amount of the overdraft is a superb idea. If I overdraft by $1000 it should cost more than if I overdraft by $1.25.
No, it doesn't imply anything. But I applaud this little trick: say as little as possible, dismiss arguments with "bullshit" and silly-goose sarcasm, and then act shocked that nobody immediately grasped what you wish to imply.
See, even smaller fees are still loans, which may have very high interest rates, and there is still that 'can you really opt out or not' problem. And of course you can still easily rack an account down from $1.50 to negative $200 very quickly. I write a $50 check on that $1.50? If the bank charges me only $2 on overdraft fees, that puts me in the negative, and then if other fees go through, well, same problem.
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Of course it's the amount of the fee. I thought that was absolutely clear from my post. See those words "excessive interest?" That implies that some amount of "interest" would not be "excessive," no?
EDIT: And yes, I think that a sliding amount based on the amount of the overdraft is a superb idea. If I overdraft by $1000 it should cost more than if I overdraft by $1.25.
No, it doesn't imply anything. But I applaud this little trick: say as little as possible, dismiss arguments with "bullshit" and silly-goose sarcasm, and then act shocked that nobody immediately grasped what you wish to imply.
Yes, you silliest of geese, it absolutely implies that some amount of interest would not be excessive.
Otherwise, I'd have said "interest" and not "excessive interest." That modifier was placed there deliberately. It has meaning. This wasn't the fucking Da Vinci code, it was a pretty simple message that I cannot believe was beyond your comprehension. If you can't grasp a statement that simple...well, I cannot help you.
If you're going to deny (or simply not understand) the basic fundamentals of the English language in which we are communicating, why should I even bother trying to discuss anything with you?
See, even smaller fees are still loans, which may have very high interest rates, and there is still that 'can you really opt out or not' problem. And of course you can still easily rack an account down from $1.50 to negative $200 very quickly. I write a $50 check on that $1.50? If the bank charges me only $2 on overdraft fees, that puts me in the negative, and then if other fees go through, well, same problem.
Actually, last I heard overdraft fees were opt-in nowadays.
And if you write a $50 check on $1.50 it's not the $2 in overdraft fees that would put you in the negative...it's the $50 check. If you were getting hit for $2 per transaction, it would take a hundred transactions to put you $200 additional dollars in the negative, beyond the dollars that you actually spent and presumably received goods or services of value for.
Obviously we could have a long and no doubt thrilling discussion about what level of overdraft fees would be reasonable (because it's fairly obvious that some non-zero amount is reasonable, or even necessary). I don't think I even claimed that overdraft fees were in and of themselves unacceptable or unethical, but rather that the excessive fees that have been the norm were. If I did fail to qualify that statement, I apologize, and correct myself as of now. It is entirely possible for a bank to charge a non-zero amount for overdrafting, and for that to be perfectly reasonable. However, the fees that have been the norm for nearly every bank for as long as I can remember are not, and those are what I'm referring to when I used the generalized "overdraft fees."
Also, it's generally accepted that the rules against excessive interest don't necessarily apply for small fees, for instance the $1.50 or so "minimum interest charge" I've seen on some credit cards. So while a $2 overdraft fee might still amount to an absurd "interest rate" on a $1.25 pack of gum, it's still such a minimal amount as not to be of concern.
Compared to $35, which is significant.
You can argue that logically the two are equivalent, somehow. And then I'll ask a thousand people whether they'd rather have $2 or $35, and we'll see how equivalent they are. Obviously the amount matters. I doubt anybody would give two shits about a $0.01 overdraft fee, even if they did stack transactions to maximize them. So obviously there exists a spectrum, where $35 seems to incite rage yet a penny wouldn't even be cause for comment. And probably a big grey area in between between "acceptable" and "unacceptable." Are you able to accept and comprehend this concept?
The same can probably be said of things like monthly debit card fees. I'd wager that $5 a month is more towards the "don't give a shit" end than the "incite rage" end, though. You seem to agree, given...
...because $5 a month is apparently an amount that makes most people think "oh hey, that's not too bad," but generates quite a bit when generated times a bajillion customers...
So most people think "hey it's not too bad" but your problem seems to be that it...generates a bunch of revenue for the bank? That a bank can make a ton of money by charging a lot of people an amount that doesn't seem to concern them?
I find it interesting that people seem to think the bank has to make a profit on every account, not just an overall profit. I was always under the impression that accounts without much money often act as loss leaders for the bank. This is because many of the accounts will belong to students or people at the start of their careers, before they start earning greater amounts. In addition these people will often use additional financial services (mortgages etc.) with the same bank their current account is with.
What I'm getting at is that by charging people, and potentially driving away customers they're surely destroying their future high income accounts?
Also, as a European, I find it strange that the use of debit cards is an 'extra' to you guys in the States. In the UK their use these days seems so integral to any account. I remember that my child account (8 or so years ago) even had a debit card that was completely free, and this was in an account that had at maximum £50.
I find it interesting that people seem to think the bank has to make a profit on every account, not just an overall profit. I was always under the impression that accounts without much money often act as loss leaders for the bank. This is because many of the accounts will belong to students or people at the start of their careers, before they start earning greater amounts. In addition these people will often use additional financial services (mortgages etc.) with the same bank their current account is with.
What I'm getting at is that by charging people, and potentially driving away customers they're surely destroying their future high income accounts?
Also, as a European, I find it strange that the use of debit cards is an 'extra' to you guys in the States. In the UK their use these days seems so integral to any account. I remember that my child account (8 or so years ago) even had a debit card that was completely free, and this was in an account that had at maximum £50.
This is exactly correct on all counts.
The only reason the major banks think they can get away with this is because they've bought out most of the competition. This is not a practice that would occur if there were adequate competition in the marketplace.
The problem in my eyes is that they apparently didn't need it for the past decade or two.
You'd think that fees would've been more common when the technology was just starting, when they weren't as common place and tons of resources needed to be poured into various cities/countries to provide massive ATM networks.
Now all that is done, and no fees... but someone gets dollar signs in their eyes and suddenly it's "$5 per month".
On top of whatever other account, ATM, CC, etc fees that may or may not be present.
It feels like a bait and switch. "Okay, you're finally accustomed to using this service, perhaps enough so to consider it vital, especially based on the convenience and *BAM* THAT'LL BE FIVE DOLLARS PER MONTH, BITCHES!"
Edit: and again, Canadian system, but I will shit flaming kittens if my bank (CIBC) institutes such a fee. Oh no, they're not getting much off my account with $20 in it! But they're making like fucking 19% per year off my credit card balance, whereas I'm getting maybe 3-5% at most on my retirement investments with them (RRSPs).
Forar on
First they came for the Muslims, and we said NOT TODAY, MOTHERFUCKER!
I find it interesting that people seem to think the bank has to make a profit on every account, not just an overall profit. I was always under the impression that accounts without much money often act as loss leaders for the bank. This is because many of the accounts will belong to students or people at the start of their careers, before they start earning greater amounts. In addition these people will often use additional financial services (mortgages etc.) with the same bank their current account is with.
What I'm getting at is that by charging people, and potentially driving away customers they're surely destroying their future high income accounts?
True, though I wonder how much of a factor it really is. All of the major national banks are just about equally hateful, so really switching between them is more of a pain than it's worth. It's more a function of banks competing with credit unions, I'd think. But there are some significant advantages to a bank over a credit union, too, so even there they can still manage to keep some customers.
Also, over here at least, you can expect your mortgage to get passed around like a cheap Thai hooker, so there's really no incentive to take one out with any particular institution. Car loans are a little better at staying put, but one of ours has still been sold off twice (the other is with the same institution we took it from initially).
Also, as a European, I find it strange that the use of debit cards is an 'extra' to you guys in the States. In the UK their use these days seems so integral to any account. I remember that my child account (8 or so years ago) even had a debit card that was completely free, and this was in an account that had at maximum £50.
They're pretty much standard here, though over here the VISA debit card (runs as a VISA/Mastercard, charges to your checking account) is more commonly used that PIN-entered versions. IIRC the PIN version is more commonly used over there.
And charging for the use of them is a new thing...which is why this is such a "big deal" to a lot of people. Yes, over here every single account will tend to come with one, and people use them pretty heavily.
The problem in my eyes is that they apparently didn't need it for the past decade or two.
You'd think that fees would've been more common when the technology was just starting, when they weren't as common place and tons of resources needed to be poured into various cities/countries to provide massive ATM networks.
Now all that is done, and no fees... but someone gets dollar signs in their eyes and suddenly it's "$5 per month".
Well, up until now they've just been able to hide the fees by charging merchants, then that gets passed along at the register (sometimes as a small transaction fee, sometimes in the form of higher prices across the board).
The fees have always been there. Now the government has said they can't charge the merchants as much, but they want to make the same money, so they're finding another way.
True, though I wonder how much of a factor it really is. All of the major national banks are just about equally hateful, so really switching between them is more of a pain than it's worth. It's more a function of banks competing with credit unions, I'd think. But there are some significant advantages to a bank over a credit union, too, so even there they can still manage to keep some customers.
I still remember various banks at all the fresher's events at uni falling over each other to give away the largest interest-free overdraft facility, so presumably they thought it was worth it (I went with Bank of Scotland, with their £2500 interest-free overdraft, incidentally).
Account switching is something that should be the subject of regulation, really. If the banks are making it difficult then that's obviously anti-competitive. Here if you want to switch banks it is up to the banks to sort out transferring over your direct debits and so forth for you. I think you need to sort out getting your salary/wages paid into the new account yourself, though.
I'm sure the 3500 hundred people they laid off in August would disagree. And the 30,000 they announced as planned mid September(WSJ predicts it'll actual be closer to 40k). And all the mortgagees who are defaulting which is what caused a lot of the loss, I'm sure they're happy about it too.
Like I said in my earlier story, they nearly bankrupted me and nearly made me homeless. It sucks for those people, but I hate BOA more than I sympathize with them.
I'm with you on this. They held 100% of my savings hostage when I moved to a new state and the associate I worked with had to close my old account to open a new/local one for the address change to take. They thought this was fishy and locked my account. I wound up telling a rep on the phone that "Yes, I understand that I moved. That is why I opened up an account with bank of America in the first place, because I was going to move to another state in America. I'm still in America." I was unable to access any money during this time and they refused to reopen the account, so they mailed a check for my entire account to my old address in a different state. It took nearly a month to get my money back. What a shitty time period to not have a credit card, too.
Fucking cunts.
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Magus`The fun has been DOUBLED!Registered Userregular
You'd think someone would've sued and won against them for something like that.
You'd think someone would've sued and won against them for something like that.
Guess not?
My life was insane then and the last thing I was thinking about doing was getting involved in another lawsuit. It didn't even occur to me that they might have broken a law.
Skoal Cat on
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Magus`The fun has been DOUBLED!Registered Userregular
I know things are better now, but I'm sorry you had to deal with that shit.
I've never had much money, but at least my CU has never fucked me over.
I work for a CU, fair good sized one, 8th largest in the nation, covers all of NE Florida with 350k+ members. Our phones have not stopped ringing. Good God we are so busy. And as a member myself for the last 12 years, all I can say is good. The more members we have the better our service will become.
I work for a CU, fair good sized one, 8th largest in the nation, covers all of NE Florida with 350k+ members. Our phones have not stopped ringing. Good God we are so busy. And as a member myself for the last 12 years, all I can say is good. The more members we have the better our service will become.
:O
I know who you work for...
I work for a CUSO and we are already preparing for the flood come Monday morning.
So we get stiff once in a while. So we have a little fun. What’s wrong with that? This is a free country, isn’t it? I can take my panda any place I want to. And if I wanna buy it a drink, that’s my business.
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Back when I was young and stupid, I overdrafted something like 70 cents. Yeah, I fucked up, I know.
Problem is they kept trying to draw the overdraft fee from my account, which made a 35.70 charge on my account (overdraft + what I didn't have) become something like $240.
So yeah, even if your account has 4.97 in funds, it could very well hurt. Which is my biggest issue. I basically have to add $5 to everything I buy.
And this is more than likely BoA trying to discourage online only banking. If I add $5 to my charges, I might as well go to their ATM. if I'm going to their ATM, I might as well go inside. If I go inside, I might as well just get the one that doesn't charge me if I talk to a real teller...
Businesses designing fees to create a profit? Scandalous!
Overdraft fees are probably the one fee that I can get behind lamenting. They're 99% bullshit, especially given the tricks that were commonly employed to maximize them and their sheer dollar amount. An account going from $1.70 over drawn to $300 in the hole instantly is obscene, and makes payday lenders look downright charitable in comparison.
But a $5 fee for debit card purchase use? Sounds like it's both reasonable (in amount), and linked to some real expense (even if yes, it is *GASP* designed to create a profit). And doesn't seem to be unavoidably tied to the more "essential" needs the bank fills. It's them charging a fee that makes them a tidy profit on a service you aren't forced to use. Scandalous!
Fees for failing to maintain a minimum balance are a bit trickier (as they're difficult to avoid, absent just having more money), though again they're usually little enough that I have a hard time giving a fuck. If you're poor-ish, replace one Big Mac a month with one pack of Ramen, fee paid. Or shop around for another institution that doesn't charge the fee, if you can find one.
Like I said in my earlier story, they nearly bankrupted me and nearly made me homeless. It sucks for those people, but I hate BOA more than I sympathize with them.
The harder the rain, honey, the sweeter the sun.
Nice goalpost shifting
The banks are raising fees because they've grown accustomed to having more profits than ever before. Seriously the last few years have been really good to the current crop of banks, less so to the ones who failed, but they failed because of blind profit motive.
Institutions that manage people's money should have a greater responsibility to their customers than that, and the government should force them to. I'm not saying they shouldn't make a profit, but what was wrong with the profits they made 10 years ago? There's no reason a business who's only goal should be to safeguard assets should be pulling in such ludicrous sums of cash, for the same reasons that health insurance companies shouldn't be pulling in ludicrous sums of cash.
Why, because you have a problem with *GASP* banks deciding to make a profit? The bank is, in essence, lending you the money to pay your overdraft instead of bouncing the check/refusing the charge. Oh, horrors, the bank might actually charge MORE for an overdraft than it actually costs them? Well, sorry, banks, but that's the one kind of profit that mcdermott thinks is "obscene", so knock it off!
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They are charging you a shitload of money to cover a quarter.
Oh horror or horrors the banks would never be able to operate if they had to cover a quarter overdraft with a sensible fee instead of taking money from someone clearly shown as unable to pay that huge price.
And if your argument is that banks should be non-profits or nationalized, you've got a point.
Otherwise? They're a business, like any other. And just like Starbuck's, Microsoft, or any other company on the planet they've got shareholders who want them to increase profits, not stagnate.
Also, I don't believe I ever claimed that the $5 debit fee was meant to cover only the expense of running those transactions, and was not intended to generate a profit. The goalposts were not shifted. Maybe you're thinking of another poster? I've maintained this entire time that this is a case of banks charging customers for the services they are providing, and quite obviously (again, businesses and not charities) making a tidy profit in doing so. If they could get away with charging $10, they could. And by the general principle that a business is there to make money, they should. Apparently $5 is the price they determined the market will bear.
And despite the gnashing of teeth we see here, I'll be unsurprised if they're correct. We'll see.
And again, I don't place charging $35 for a penny of overdraft to be on the same ethical plane as charging for a debit card. Oh, and reordering transactions to maximize those fees, rather than charging them chronologically.
Shit ain't binary, quit pretending it is. Thanks.
EDIT: I mean, if you want to say that charging $5 a month for a debit card is the same as charging $300 for $7 in overdrafts, cool. I'm going to call you a silly goose, though. Goose.
So, it's OK for a bank to charge a fee well above its actual cost of providing that service purely to increase profits, and anyone who says otherwise makes you stagger for the fainting couch. *GASP!* Unless, of course, it's a fee that you personally think is bullshit, and "mcdermott thinks it's bullshit" is an airtight, logical rebuttal to anyone who asks why an overdraft fee and a debit fee are different.
Sarcasm != logic, no matter how hard you fluff it. So please explain to me why it's wrong for a bank to charge a monthly fee, not to cover costs, but to maximize profits, if and only if that fee is not an overdraft charge. "That's bullshit" is not exactly an argument.
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One is charging a reasonable fee (even if profit-producing) for a reasonable service.
The other is usury. It's hard to sell overdraft "protection" as anything other than a short-term loan; when you opted in (or were forced in by the bank, back when most didn't make it optional) the bank agreed to, on demand, issue you a short term loan to cover the amount of any excess transactions. And I'm exactly as accepting of the "fees are different" argument to avoid laws regarding excessive interest in the context of banks as I am in the context of payday loans. Which is not at all. The arguments against overdraft fees are the same arguments against charging 1000% interest on a loan in any other context. Which are entirely different than the argument against a simple, affordable (regardless of how poor you are, $5 is affordable) monthly fee.
As for the reordering of transactions to maximize the number of fees drawn, I suspect I can refer you to the court ruling (against Wells Fargo, IIRC) on the matter. That is also different than a simple monthly fee.
Yes, and the issues that caused that are entirely and completely separate from the issue of small, recurring fees on the consumer banking end. I'm not really buying the use of the one to attack the other.
Though yes, I agree that an argument can be made for having non-profit or state-run consumer banking programs, considering how vital they are to participation in the modern economy.
Until then, BofA is a business. I expect them to act accordingly, and as such I am neither shocked nor particularly offended over most of the fees they charge.
I had the same thing happen to me when I closed a bank account with Bank North after I moved back to Florida. They ended up trying to bill me for over $300 in fees for what amounted to I believe a $5 overdraft.
When I went to open a checking account down here after getting settled, I was denied because Bank North had put into the ChexSystems (basically a credit reporting agency for checking accounts) that I had "abused" my checking account.
I ended up being forced into joining my Mom's checking account, or else pay a fee every time I needed to cash a check and make out money orders to pay my bills...
They are called Credit Unions, and more people should join them.
Yep. Pretty grateful that I have family members in the military. My roommate and resident international student hates me.
True, and all the more reason for me not to give much of a shit about these fees from BofA and others (since, you know, options).
Though as I've made clear, I'd not care all that much anyway.
I'd probably be with a credit union, if I didn't get the super-platinum-don't-pay-fees-and-get-cool-stuff account from a major bank through my employer.
Yeah, I get my choice of membership with 3 different CUs because of my employer.
Why is it a reasonable fee? The bank is not in the red charging no fee. It is slapping on $5 for the use of your own money, not because it actually costs anywhere near that much to administer, but because $5 a month is apparently an amount that makes most people think "oh hey, that's not too bad," but generates quite a bit when generated times a bajillion customers. Plus, maybe people who are close to the margin will fuck up and forget the fee and you can charge an overdraft fee!
I agree entirely on the reordering of transactions. That's complete bullshit, because it's not something the customer agrees to and which is part of the normal processing of transactions. It's a mechanism to deliberately overdraw people's accounts by the bank's actions, not the accountholder's actions.
But for overdraft fees, your argument is purely about the amount of the fee, then? It would be OK if banks only charged $10 per no-bounce, or perhaps a sliding scale depending on the amount of the overdraft? Are you really arguing that overdraft fees of any amount are usury and wrong? That sounds like some binary shit right there.
Because if the basis of your argument is 'man, it sucks if your account goes from $1.40 to negative three hundred,' would that still be your position if I wrote $150 of checks on that remaining $1.40?
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The "use your money lulz" argument is bullshit. There are still other ways to use your money without incurring fees. They are charging you to use a debit card to use your money, not to use your money.
You may have an argument regarding min-balance fees, because for customers financially unable to maintain such a balance it's unavoidable. Even then, there are usually ways to avoid those fees (such as using direct deposit).
Actually, it was in general written into customer agreements, and I believe notifications were sent out to existing customers. It's a practice so abusive, however, that I'd argue that even with notice it is unacceptable. It's an entirely unconscionable business practice.
Of course it's the amount of the fee. I thought that was absolutely clear from my post. See those words "excessive interest?" That implies that some amount of "interest" would not be "excessive," no?
EDIT: And yes, I think that a sliding amount based on the amount of the overdraft is a superb idea. If I overdraft by $1000 it should cost more than if I overdraft by $1.25.
Why is it the bank's problem if you can't keep enough money in the bank? Isn't that right back to the ol' "it costs us this much to administer your money" argument? As for debit cards, you can make that argument about any random fee. Oh no, it's not that they're trying to profit off you accessing your money, it's that they just have a fee for THIS way of accessing your money.
I'm pretty sure that it was not specifically written into customer agreements that WF would deliberately process transactions out of chronological order so that they could pile up overdraft fees. Vague all-encompassing legalese in 4-point type is not really the same as notifying your customers.
No, it doesn't imply anything. But I applaud this little trick: say as little as possible, dismiss arguments with "bullshit" and silly-goose sarcasm, and then act shocked that nobody immediately grasped what you wish to imply.
See, even smaller fees are still loans, which may have very high interest rates, and there is still that 'can you really opt out or not' problem. And of course you can still easily rack an account down from $1.50 to negative $200 very quickly. I write a $50 check on that $1.50? If the bank charges me only $2 on overdraft fees, that puts me in the negative, and then if other fees go through, well, same problem.
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Yes, you silliest of geese, it absolutely implies that some amount of interest would not be excessive.
Otherwise, I'd have said "interest" and not "excessive interest." That modifier was placed there deliberately. It has meaning. This wasn't the fucking Da Vinci code, it was a pretty simple message that I cannot believe was beyond your comprehension. If you can't grasp a statement that simple...well, I cannot help you.
If you're going to deny (or simply not understand) the basic fundamentals of the English language in which we are communicating, why should I even bother trying to discuss anything with you?
Actually, last I heard overdraft fees were opt-in nowadays.
And if you write a $50 check on $1.50 it's not the $2 in overdraft fees that would put you in the negative...it's the $50 check. If you were getting hit for $2 per transaction, it would take a hundred transactions to put you $200 additional dollars in the negative, beyond the dollars that you actually spent and presumably received goods or services of value for.
Obviously we could have a long and no doubt thrilling discussion about what level of overdraft fees would be reasonable (because it's fairly obvious that some non-zero amount is reasonable, or even necessary). I don't think I even claimed that overdraft fees were in and of themselves unacceptable or unethical, but rather that the excessive fees that have been the norm were. If I did fail to qualify that statement, I apologize, and correct myself as of now. It is entirely possible for a bank to charge a non-zero amount for overdrafting, and for that to be perfectly reasonable. However, the fees that have been the norm for nearly every bank for as long as I can remember are not, and those are what I'm referring to when I used the generalized "overdraft fees."
Compared to $35, which is significant.
You can argue that logically the two are equivalent, somehow. And then I'll ask a thousand people whether they'd rather have $2 or $35, and we'll see how equivalent they are. Obviously the amount matters. I doubt anybody would give two shits about a $0.01 overdraft fee, even if they did stack transactions to maximize them. So obviously there exists a spectrum, where $35 seems to incite rage yet a penny wouldn't even be cause for comment. And probably a big grey area in between between "acceptable" and "unacceptable." Are you able to accept and comprehend this concept?
The same can probably be said of things like monthly debit card fees. I'd wager that $5 a month is more towards the "don't give a shit" end than the "incite rage" end, though. You seem to agree, given...
So most people think "hey it's not too bad" but your problem seems to be that it...generates a bunch of revenue for the bank? That a bank can make a ton of money by charging a lot of people an amount that doesn't seem to concern them?
Tragedy!
What I'm getting at is that by charging people, and potentially driving away customers they're surely destroying their future high income accounts?
Also, as a European, I find it strange that the use of debit cards is an 'extra' to you guys in the States. In the UK their use these days seems so integral to any account. I remember that my child account (8 or so years ago) even had a debit card that was completely free, and this was in an account that had at maximum £50.
This is exactly correct on all counts.
The only reason the major banks think they can get away with this is because they've bought out most of the competition. This is not a practice that would occur if there were adequate competition in the marketplace.
You'd think that fees would've been more common when the technology was just starting, when they weren't as common place and tons of resources needed to be poured into various cities/countries to provide massive ATM networks.
Now all that is done, and no fees... but someone gets dollar signs in their eyes and suddenly it's "$5 per month".
On top of whatever other account, ATM, CC, etc fees that may or may not be present.
It feels like a bait and switch. "Okay, you're finally accustomed to using this service, perhaps enough so to consider it vital, especially based on the convenience and *BAM* THAT'LL BE FIVE DOLLARS PER MONTH, BITCHES!"
Edit: and again, Canadian system, but I will shit flaming kittens if my bank (CIBC) institutes such a fee. Oh no, they're not getting much off my account with $20 in it! But they're making like fucking 19% per year off my credit card balance, whereas I'm getting maybe 3-5% at most on my retirement investments with them (RRSPs).
True, though I wonder how much of a factor it really is. All of the major national banks are just about equally hateful, so really switching between them is more of a pain than it's worth. It's more a function of banks competing with credit unions, I'd think. But there are some significant advantages to a bank over a credit union, too, so even there they can still manage to keep some customers.
Also, over here at least, you can expect your mortgage to get passed around like a cheap Thai hooker, so there's really no incentive to take one out with any particular institution. Car loans are a little better at staying put, but one of ours has still been sold off twice (the other is with the same institution we took it from initially).
They're pretty much standard here, though over here the VISA debit card (runs as a VISA/Mastercard, charges to your checking account) is more commonly used that PIN-entered versions. IIRC the PIN version is more commonly used over there.
And charging for the use of them is a new thing...which is why this is such a "big deal" to a lot of people. Yes, over here every single account will tend to come with one, and people use them pretty heavily.
Well, up until now they've just been able to hide the fees by charging merchants, then that gets passed along at the register (sometimes as a small transaction fee, sometimes in the form of higher prices across the board).
The fees have always been there. Now the government has said they can't charge the merchants as much, but they want to make the same money, so they're finding another way.
I still remember various banks at all the fresher's events at uni falling over each other to give away the largest interest-free overdraft facility, so presumably they thought it was worth it (I went with Bank of Scotland, with their £2500 interest-free overdraft, incidentally).
Account switching is something that should be the subject of regulation, really. If the banks are making it difficult then that's obviously anti-competitive. Here if you want to switch banks it is up to the banks to sort out transferring over your direct debits and so forth for you. I think you need to sort out getting your salary/wages paid into the new account yourself, though.
I'm with you on this. They held 100% of my savings hostage when I moved to a new state and the associate I worked with had to close my old account to open a new/local one for the address change to take. They thought this was fishy and locked my account. I wound up telling a rep on the phone that "Yes, I understand that I moved. That is why I opened up an account with bank of America in the first place, because I was going to move to another state in America. I'm still in America." I was unable to access any money during this time and they refused to reopen the account, so they mailed a check for my entire account to my old address in a different state. It took nearly a month to get my money back. What a shitty time period to not have a credit card, too.
Fucking cunts.
Guess not?
Steam Profile | Signature art by Alexandra 'Lexxy' Douglass
My life was insane then and the last thing I was thinking about doing was getting involved in another lawsuit. It didn't even occur to me that they might have broken a law.
I've never had much money, but at least my CU has never fucked me over.
Steam Profile | Signature art by Alexandra 'Lexxy' Douglass
http://www.seattlepi.com/local/article/Debit-card-fees-irk-customers-prompt-flight-to-2196936.php
I work for a CU, fair good sized one, 8th largest in the nation, covers all of NE Florida with 350k+ members. Our phones have not stopped ringing. Good God we are so busy. And as a member myself for the last 12 years, all I can say is good. The more members we have the better our service will become.
:O
I know who you work for...
I work for a CUSO and we are already preparing for the flood come Monday morning.
And once the customer flights has ebbed out, the other banks will follow suit with similar fees.