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An Angry [Consumer Banking] Thread
Houn
Registered User regular
Registered User regular
Looked around, didn't see anything on this yet. Came across this article in a few places today:
I'm with Chase, but I'm switching to a Credit Union in the near future, and I'm going to make sure they know exactly why it is they no longer have the pleasure of my money.
http://www.nytimes.com/2011/09/30/business/banks-to-make-customers-pay-debit-card-fee.html?_r=1Banks to Make Customers Pay Fee for Using Debit Cards
By TARA SIEGEL BERNARDand BEN PROTESS
Published: September 29, 2011
Bank of America, the nation’s biggest bank, said on Thursday that it planned to start charging customers a $5 monthly fee when they used their debit cards for purchases. It was just one of several new charges expected to hit consumers as new regulations crimp banks’ profits.
Wells Fargo and Chase are testing $3 monthly debit card fees. Regions Financial, based in Birmingham, Ala., plans to start charging a $4 fee next month, while SunTrust, another regional powerhouse, is charging a $5 fee.
The round of new charges stems from a rule, which takes effect on Saturday, that limits the fees that banks can levy on merchants every time a consumer uses a debit card to make a purchase. The rule, known as the Durbin amendment, after its sponsor Senator Richard J. Durbin, is a crucial part of the Dodd-Frank financial overhaul law.
Until now, the fees have been 44 cents a transaction, on average. The Federal Reserve in June agreed to cut the fees to a maximum of about 24 cents. While the fee amounts to pennies per swipe, it rapidly adds up across millions of transactions. The new limit is expected to cost the banks about $6.6 billion in revenue a year, beginning in 2012, according to Javelin Strategy and Research. That comes on top of another loss, of $5.6 billion, from new rules restricting overdraft fees, which went into effect in July 2010.
And even though retailer groups had argued that lower fees were important to keep prices in check, consumers were not likely to see substantial savings. In fact, they are simply going to end up paying from a different pot of money.
Or as Jamie Dimon, chief executive of JPMorgan Chase, put it after passage last year of the Dodd-Frank Act, “If you’re a restaurant and you can’t charge for the soda, you’re going to charge more for the burger.”
Chase is now charging customers for a paper statement. It also, like many other banks, scrapped its debit card rewards program. And customers that Chase inherited from Washington Mutual no longer enjoy free checking accounts.
The bank is also exploring a number of other fee increases, including for online banking, according to people with knowledge of the matter.
Bank of America’s debit fee is steeper than most of its competitors’, reflecting the broader challenges the bank is facing after the financial crisis. The bank has introduced an online-only account that charges customers for doing business at a local branch. It also plans to apply its new debit card fees to anyone who uses the card to make recurring payments like gym fees or cable bills.
Citibank is one of the few that said it would not introduce a charge for debit card use. “We have talked to customers and they have made it abundantly clear that ‘if you charge me to use my debit card, I would find that very irritating,’ ” said Stephen Troutner, head of Citi’s banking products. Still, the bank has made it more difficult to qualify for free checking, among other moves.
Earlier this year, Wells Fargo estimated that the Durbin rules would cost the bank $250 million in revenue every quarter. It hopes to make up half that gap with a variety of new products and customer fees, including the monthly debit card fee of $3. The change is part of a “pilot program” the bank will begin on Oct. 14 in five states across the country, including Washington and Georgia. As of Saturday, the bank will discontinue its debit card rewards program.
Meanwhile, HSBC said that it recently increased an A.T.M. fee — to $2.50 from $2 — for certain customers when they used a competitor’s A.T.M. It also recently introduced a debit transaction fee of 35 cents, though the first eight transactions are free.
And at TDBank, customers will now have to pay $2 for using A.T.M.’s outside their network.
“Durbin essentially moves the cost of debit away from merchants, and now it’s more focused on consumers,” said Beth Robertson, director of payments research at Javelin. “There are all sort of things happening where banks are saying, where can we put fees in place for our service to generate revenue or how can we reduce our costs?”
Over the last few years, consumers have increasingly shifted their spending to debit cards from credit cards, in large part to curb their spending. But some analysts predicted that the new fees could prompt consumers to return to credit cards — a more lucrative alternative for the banks.
Consumers have already begun to react to the changes.
Patrick Shields, 48, said he had decided to leave Citibank, where he has held a small-business account for his residential window cleaning business since 1986. He was contemplating opening a personal checking account, but realized he could do better at a credit union.
“At the credit union, they opened it free of charges, which Citi could not and would not do,” said Mr. Shields, who noted that a personal checking account would have cost more than the one he uses for his New York business. “Now I have both accounts covered, and I am fee-free.”
The so-called Durbin rule quickly emerged as one of the thorniest provisions of Dodd-Frank, touching off a long and furious fight in Washington. Wall Street dispatched an army of lobbyists to tame the rule, ultimately yielding mixed results.
In June, the Senate defeated a measure that would have delayed the new rule. But just three weeks later, the Federal Reserve decided to cap the fees at 21 to 24 cents for each debit card transaction, a much lighter blow than once expected.
In a statement on Thursday, Senator Durbin, Democrat of Illinois, said that small businesses would benefit from the new limits. “Swipe fee regulation will still allow banks to cover the actual costs of debit transactions but will rein in the banks’ excessive profit-taking.”
Ann Carrns contributed reporting.
A version of this article appeared in print on September 30, 2011, on page A1 of the New York edition with the headline: Banks to Make Customers Pay Debit Card Fee.
I'm with Chase, but I'm switching to a Credit Union in the near future, and I'm going to make sure they know exactly why it is they no longer have the pleasure of my money.
Houn on
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Fucking banks. How does this affect overdraft fees? I know those have put the thumbscrews on millions of very poor american families, especially with the absolutely deceptive practice of applying time travel to debits and credits in order to create a fee
Or is that already taken care of
This debit card fee is bullshit on BofA's part. Pure and simple.
They gave me $100 for opening an account with them and want to give me another $100 for depositing $10,000 from another account.
Despite all this, the credit union makes a healthy profit - some of which I get back as a member - and has a hefty reserve. They are also extremely nice and helpful whenever I need anything.
It's amazing how well an institution can run when it doesn't pay its bankers multi-million dollar bonuses and then have to scramble for profits to throw the shareholders.
Edit: Is USAA better than chase? I actually have USAA for my insurance thanks to my Dad having served in the air force. I need to figure out my options.
that's why we call it the struggle, you're supposed to sweat
They kind of own me. But at least rhey're nice to me in return.
I'm a former Washington Mutual customer, which meant that for a long time I got a much sweeter deal on my checking account than they would ever give to a new customer. I moved to a credit union when Chase finally started charging account fees to former WaMu customers a year or so ago, but I wound up leaving the account open for a couple months because my debit card was tied into so many different things and the new one from the credit union took a while to show up.
Anyway I finally went in to close the account and the nice lady they had me talk to proceeded to give me a 10 minute sales pitch (over my objections) about some eco-friendly development they were bankrolling in seattle (or something like that.) Like, fuck you chase, I'm closing my account because you starting charging me, not because I think you aren't doing enough to for the environment.
that's why we call it the struggle, you're supposed to sweat
Don't be afraid to say no to a sales pitch, and remember to leverage anything you can for better service. Have 10 grand in a savings or IRA you'd be willing to move into the bank? TELL them, but get them to do something for you. Free premium checking, take care of overdraft fees, whatever. Ask for things and you'd be surprised what they're often willing to give you.
I came over from WaMu, and while I've never had any real problems with Chase (other than their ads being irritating, and they still haven't given my wife a new debit card with her married name on it despite multiple requests), but they're on that list of banks charging a fee for debit usage, so...
So, goodbye! I'm done supporting an industry so blatantly anti-customer.
I think the problem is with the customers who don't have ten grand to move. The banks have very obviously targeting the poor with onerous fees, and now they feel comfortable spreading that pain to the middle class:
http://www.csmonitor.com/Business/Latest-News-Wires/2011/0927/Checking-account-fees-too-expensive-for-poor
Like a lot of things in our society, having a good deal of money insulates you from these abuses.
Oddly enough, that fee was mitigated by the vast majority of people signing up for overdraft protection. I looked at an earnings report and apparently %90 of customers signed up for overdraft protection. Turns out Joe average likes not having his credit card declined when he's broke and will pay a fee for that. Who knew?
Oddly, my dad was in the Marines but his information wasn't recognized by their automatic authorization system.
Edit: Maybe they're just down on adopted kids. Like Glados.
(apparently I edited a post that I saw two of, but only posted once /boggle)
Anyway, it's not that most people actually want the service, it's that banks are really good at getting people to opt in. The Chase version at least of the pitch at least tries very hard to imply that you'll be charged the fee anyway, but this way your card will still work. And while I think you are charged a fee if you continue to use the card while your account's empty, it's much smaller than the fee chase will charge to float you the purchase (nevermind the shenanigans that they still pull with deposit/withdrawal times.)
I know this because I used to get the opt-in pitch every month with my email statement, and eventually I bothered to actually read it before declining again.
that's why we call it the struggle, you're supposed to sweat
that's why we call it the struggle, you're supposed to sweat
Which, considering it is a credit line, is a bit odd.
that's why we call it the struggle, you're supposed to sweat
Chase was by far the worst bank like 5 years ago, especially regarding time travel overdraft policies.
I'll admit that overdraft protection did have some utility back in the early 90s, when debit cards first appeared and a lot of businesses tried to treat declined cards the same way as bounced checks - i.e. they called the law.
However, although I'm not a customer, my biggest current gripe is with Citi. Because if I have to hear one more time about the douchebag who bought a weather balloon with points...
OH MY GOD YES
When I was poor and struggling, I lost so much money to Washington Mutual's fucking overdraft bullshit.
the "no true scotch man" fallacy.
Their financial services folks were apparently in the tank for years running, but the consumer end always treated me right.
that's why we call it the struggle, you're supposed to sweat
TD's website sucks, but they work for me because they write out/ship a few bank checks for me every month for freesies.
Chase is pretty cool because they pretty much have an ATM every third block.
In my mind, the real bullshit here is that they're still making money off personal banking, they just make more money elsewhere so fuck the working class, yo! I really hope we get some banking regs back on the books so the banks that want to act like, you know, banks can just do that, and the ones that don't can just sell off the lines of business that deal with touching icky poor people money.
THIS. The bank uses incredibly odd wording and "scare" terms to get people to sign up for it, without really understanding what this overdraft "protection" really is. I've had to actually explain it to a few people, including my mother, who had no idea what the bank was actually signing them up for. I've actually gotten pretty angry about how the banks word it.
Anyways, MY former bank, Suntrust, started charging for using their debit card too. And when I complained online about it, the "helpful" representive's great advice was, "Oh, you just don't need to USE your card and you'll be charge free!"
Not long after, I decided I didn't need to USE their bank, and canceled my two accounts with them and helped my mother cancel hers. We are now happily using a local small bank.
When I closed my accounts with Suntrust, and I told them I was doing it because of the new check card charges (which they don't charge people who have thousands in their accounts), they told me; "Oh. Well, you see, soon ALL banks will be doing this, we're just the first, so you might as well stay with us." I
then told them that, be that as it may, as long as I could find a bank that wouldn't charge, I would be saving money during that time. They then asked me to get a credit card 0_o .
So... yeah, big banks, fuck 'em.
Meanwhile, my credit union gives not a single fuck if I don't grace their machines with the swipe of my card all year, whenever I need it to work, it just works. Whats so difficult about that?
Oh, and if USAA banking really is available to everyone, I highly recommend it.
I've heard nothing but bad things about big banks, and only the occasional anecdotal gripe about CUs.
Yes, credit unions were once much more restrictive about their membership, but as laws have changed, they're able to open themselves up to anyone inside a very broad circle. It's a fig leaf, at this point. I know a credit union here in Austin that has as a requirement for membership "the group of people who bought a car from the dealers we loan through".
@StuffGuy Yes, overdraft protection from the big banks means they loan you money when you go over your balance, and charge you $20 or $30 for EACH transaction below the $0 balance. Of course, you end up with situations like this:
I have $50 in my account.
One morning, I charge 5 things at $5 each.
At noon I charge one thing for $46, and make a $100 deposit by check.
The bank, that evening, processes the withdrawals first, and in the following order: the $46 transaction first, then each of the $5 ones. This means instead of one overdrafted transaction, I have 5. Each of them costs me $20.
Instead of -$31 (-$12 + a single $20 fee), I my account is now at -$121. The $100 deposit is then applied, after all the withdrawals. It is eaten by fees, leaving me at -$21. Unless I am smart and check my balance, I may not know that I'm still negative, since I thought I had $150 in deposits and $76 in charges that day. So I go the next morning and buy a breakfast taco that ends up costing me $24, a latte that ends up costing me $24, lunch that ends up costing me $30, and when I try to put gas in my car the card is declined since I'm now down to -$99 and that's my cutoff.
On my Chase personal account, if I overdraw it (and neglect to transfer or deposit money myself by midnight), they will just automatically transfer the money to cover it from my savings account. There is absolutely no reason not to take advantage of this feature at your bank. Some banks charge a nominal fee for the transfer, like 4 bucks, but it's 4 bucks per DAY that it needs to transfer to cover overdrafts, not per transaction. ie, if my account is overdrawn by 6 individual transactions, then after midnight Chase will make one transfer to cover them and charge me a couple bucks, one time, rather than 6 $35 fees.