Banks' check-clearing policies could leave you with overdrafts

Full story: WZZM Grand Rapids

As we write checks and use our debit cards this holiday season, banks are forcing some of us to overdraw more often by clearing the largest transactions first, instead of processing them in the order they come ...
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Lisa Routley

Granbury, TX

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#1
Nov 4, 2007
 
I thank you guys are good.
Punkey Brewster

Muskegon, MI

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#2
Nov 5, 2007
 
I get paid once a month . When I put my check into my account it takes five days to clear because it is over 5 grand . They say it is because of this Home Land Security and Check fraud .
I miss the days of just getting it cashed . I now budget very well though .
WeAreInThisToget her

Carrollton, TX

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#3
Nov 5, 2007
 
"Their mortgage payment is the last check they want to bounce," says John Hall, spokesman for the American Bankers Association. "There are severe penalties and embarrassment."
This statement is laughable!
WeAreInThisToget her

Carrollton, TX

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#4
Nov 5, 2007
 
to add... most financial transactions today are impersonal so the element of embarrassment would most likely not exist in this example, which makes the latter part of the statement really cavalier. What is embarrassing is having to pickup a twenty-eight fifty check from the barber plus an additional thirty for the fee plus the thirty-five dollar fee the bank charges, each fee is more than the face value of the check!

At least all of your money is not eaten up with the fees on the bounced mortgage payment and your more likely able to come-up with the hundred dollar shortage (which includes the fees) than the two-hundred or three-hundred dollars in fees created by the avalanche effect.

It seems to me some in business are stating to the populace "We think you're all idiots and don't care that you know that is what we think."
maureenlee

Kalamazoo, MI

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#5
Nov 5, 2007
 
Dam* Crooks --all of them.

Since: Oct 07

Big Rapids, MI

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#6
Nov 5, 2007
 
Coming from a person who acctually works at a bank. Dont spend money you dont have, the days of writing a check one day and having one or two days to deposit the money into your account are over. With places doing tele check everything is almost instant. Some place now have remote capture (where they acctually process the check right there instead of having to bring it to a bank. And about all these non sufficent fund fees, I really dont know how you can overdraw your account so many times and not know it. in the days of ATM's and Internet Banking, keep track of your money people. its really not hard

“Lost my mind”

Since: Apr 07

be back later

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#7
Nov 5, 2007
 
Punkey Brewster wrote:
I get paid once a month . When I put my check into my account it takes five days to clear because it is over 5 grand . They say it is because of this Home Land Security and Check fraud .
I miss the days of just getting it cashed . I now budget very well though .
I'm not sure where you bank.. but for large checks, if I ask, my credit union will actually call the issuing institution to make sure the funds are in the account and clear it immediately. Check with your bank/credit union and see if they are willing to do this for you. I know 5/3 won't, I asked when we banked with them. Not only that, but they also made us wait 10 BUSINESS days for a large check to clear! No, we are longer with them!
:)
WeAreInThisToget her

Carrollton, TX

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#8
Nov 6, 2007
 
CrimStudent wrote:
Coming from a person who acctually works at a bank. Dont spend money you dont have, the days of writing a check one day and having one or two days to deposit the money into your account are over. With places doing tele check everything is almost instant. Some place now have remote capture (where they acctually process the check right there instead of having to bring it to a bank. And about all these non sufficent fund fees, I really dont know how you can overdraw your account so many times and not know it. in the days of ATM's and Internet Banking, keep track of your money people. its really not hard
Of course one should balance/track their account activity but the issue is really about NSF fees and you must admit that it is far more profitable to the bank to have the account OD on three items than on only one. In other words they have incentive to do it this and they do.

Since you work for at a bank can you tell us what happens (at your bank) to the funds between the time a large items is deposited, the time it clears the istitution drawn on and the time that amount is available to the depositor? I once made a transfer from one account into an account at another institution. The funds were deducted from my account on the next business day but did not show up in my other account for another four business days. I am aware of the six day policy at my institution where the funds were tranferred to but, someone had access to those funds for four days while I did not.

Since: Oct 07

Big Rapids, MI

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#9
Nov 6, 2007
 
ok, first issue of large deposits, our banks put a hold on large and out of state checks that you deposite into your account not only for our protection but for your own. However i know of a few regular customers that come in weekly with out of state checks and we call that institution to verify funds. Second-Of course it is moreprofitable for us if you overdraw you account three times instead of once, but most of the time if someone catches this we will refund at least one of those fees depending on the account, amount.
Transfering money from one bank to another isnt as speedy as you would think, unless of course you yourself withdraw from one and physically take it to another and deposit. And not all banks will do this, I know our bank does not trasnfer to certain banks, for what reason i couldnt tell you. And when u transfered and did not have access to it..the bank you transfered to did. They just didnt want you to have it until they were 100% certain that the funds were there.
WeAreInThisToget her

Carrollton, TX

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#10
Nov 6, 2007
 
CrimStudent wrote:
ok, first issue of large deposits, our banks put a hold on large and out of state checks that you deposite into your account not only for our protection but for your own. However i know of a few regular customers that come in weekly with out of state checks and we call that institution to verify funds. Second-Of course it is moreprofitable for us if you overdraw you account three times instead of once, but most of the time if someone catches this we will refund at least one of those fees depending on the account, amount.
Transfering money from one bank to another isnt as speedy as you would think, unless of course you yourself withdraw from one and physically take it to another and deposit. And not all banks will do this, I know our bank does not trasnfer to certain banks, for what reason i couldnt tell you. And when u transfered and did not have access to it..the bank you transfered to did. They just didnt want you to have it until they were 100% certain that the funds were there.
Thanks for the reply but you didn't answer the question so I'll state the scenario again;

Step 1: Money is tranferred and the transaction is confirmed by the institution where the transfer was transacted.

Step 2: On the next business day the institution where the funds were to be withdrawn acknowledges the transaction by debiting the account for the amount.

Step 3: Funds are no longer available in the debited account and do not become available in the credited for another four business days.

Since banks must report what they are holding on deposit then is reporting that amount during those four days?
WeAreInThisToget her

Carrollton, TX

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#11
Nov 6, 2007
 
Correction: "...then which institution is reporting that amount during those four days?"

Since: Oct 07

Big Rapids, MI

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#12
Nov 6, 2007
 
the bank you trasnfered to, they are the ones who put the "hold" on it, once we post that we have debited your account...its up to them and their policy

Since: Sep 07

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#13
Nov 6, 2007
 
So, basically - vendors can take OUR money instantly, but money DUE to us has to go through a check clearing process.

What b.u.l.l. Banks AND credit unions are becoming nothing more than a pain in the rear. Get enough people going on cash-only basis, and these banks and CUs will start offering REAL service again.

Since: Oct 07

Big Rapids, MI

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#14
Nov 6, 2007
 
cash only? how are you going to get cash? i doubt your place of employment will pay you in cash and if you want to cash a check on a bank you dont have accounts with..let me know when you get sick of those $8-10 fees every week
WeAreInThisToget her

Carrollton, TX

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#15
Nov 6, 2007
 
CrimStudent wrote:
the bank you trasnfered to, they are the ones who put the "hold" on it, once we post that we have debited your account...its up to them and their policy
Thank you for engaging me on this topic. I'll leave the subject with this thought;

If 1,000 depositors (bank customers) transferred 1,000 dollars each into their accounts from outside institutions, under that four day blind the bank's got access to one million dollars for four days, at no charge.

Since: Sep 07

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#16
Nov 6, 2007
 
I would keep our service ONLY to cash my checks. We've been doing it for some time now. We keep JUST enough in there to cover any checks that have to be mailed.

Use your imagination Crim - oh wait. You work for a financial institution.

Since: Oct 07

Big Rapids, MI

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#17
Nov 6, 2007
 
WeAreInThisTogether wrote:
<quoted text>
Thank you for engaging me on this topic. I'll leave the subject with this thought;
If 1,000 depositors (bank customers) transferred 1,000 dollars each into their accounts from outside institutions, under that four day blind the bank's got access to one million dollars for four days, at no charge.
technically yes...but then again no...its not like we are going to hand it out to someone else..we are just trying to cover our own butt...too much fraud now adays

Since: Oct 07

Big Rapids, MI

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#18
Nov 6, 2007
 
Lucy in Rockford wrote:
I would keep our service ONLY to cash my checks. We've been doing it for some time now. We keep JUST enough in there to cover any checks that have to be mailed.
Use your imagination Crim - oh wait. You work for a financial institution.
haha wow i love it...that just becasue i work in a respectable field i have no imagination, awesome. If you hate banks so much you should close out all accounts. by keeping some money in you are still feeding the machine so to speak correct? a cash only economy will never happen, cash is becoming a thing of the past anyway. I know i hardly keep any on me with direct deposit and debit cards who needs it?

Since: Sep 07

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#19
Nov 6, 2007
 
You really DON'T have imagination, do you?! I'm not feeding the machine at all ... it's feeding ME. The real money is in the big loans, and you KNOW it. Which is something that banks and credit unions are trying very hard not to do with individuals - they're focusing more on the big businesses. And that's fine. But it's the little people who make it all work.

I'll cash my check at my CU - take MY money out, leave a pittance in. It's all it's good for.

Since: Oct 07

Big Rapids, MI

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#20
Nov 6, 2007
 
You have been watching too many capital one commercials or whatever those ones are they say that the little people dont matter, my bank was started right here in west michigan and thats where is has stayed. We are built on little people with only a small commercial loans department but almost double the size of that is the personal,mortage and personal insurance dept..weird

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