Lawmakers examine bank, credit-card fees

As Kathy Chiero's son headed back to college in August, she wanted to open a small checking account with a debit card so he could access funds that typically totaled less than $100 at any given time.

[Bill]

My bank actually DELAYS making payments that I have made both electronically and by check
and this is deliberate so that 'perhaps' when that money is still showing in the account
that I will make a MISTAKE and then they can charge me an overdraft!!

FIFTH THIRD is the WORST!! They are not only gaming the system, they are sitting on my
money as long as they can after I have initiated a payment! I have noticed this in the past
6 months. Additionally, they will take their good ol time showing funds available after they
have been deposited! This way, they can hang on to my money as long as they possibly can
and hoping that I will screw up because of their lengthy delays for the over draft fees.

They are the ONE credit card that has also reduced my credit limit on my credit card and for no reason....because there is NO reason. I do think they are in trouble when they start messing with my little checking account. Do not bank with 5/3 or you'll be sorry

[Casual Observer]

Yes, the banks should use the state and county governments as a model for reasonable fees:$55 for a small sticker for your license plate,$25 for a driver's license, hundreds of dollars to record real estate transfers, or $75 to have Columbus spend 5 minutes inspecting someone elses work.

A simple solution might be to check the balance in an account before you spend. But that would require personal responsibility and these days that is no longer required. Son we will see the reqirements to have a checking account increase where few people will be able to have one.

[cw hippy]

obviously they need more money to influence their constituents

[JIM]

Fees are not the big proplem.It is interest rates on bank credit cards that are between 11 and 35 percent that are the big problem.This is nothing but Legalized Loan Sharking.10 percent should be the limint.

[been there]

I think National City is the worse. I had 2 transactions pending that were unknown to be. I found out that someone hacked into my account. I tried to get them to stop the pending transactions, because they would overdraft me, I was told by the customer service 800 rep, that nothing could be done until it cleared and than I could fight it. They paid the transactions, charged me overdraft fees, than charged me daily overdraft fees because I had no money to put in the bank, plus all my checks were returned and charged overdraft fees for. So, when my next direct deposit went into the bank, I once again had no money because they took it. I tried clossing the account, but was told I wasn't allowed to close my account because there wasn't enough money in the account for them to process the fee to close my account. Now, they are sending me nasty letters telling me I have been put in a bad check system because my account has been charged off beacuse I owe them money. What about the money that was stolen from my account and they let it happen?? The rep that called and told me they would do anything to recover their money, said that the problem was between me and national city bank, he couldn't help me get my stolen money back beacuse he worked for PNC. I thought PNC owned national city? What is worse, it was my tax money that helped bail out these banks. So much for my hard earned money.

[jed]

I am trying to get a loan, and was told by my bank, US Banks, that they only like doing business with customers who have a credit score of 620 or above. So, my credit was good enough for you to open an account, to get my money in your bank, but not I am not a good enough person to give money to, even though I have been a good and faithful customer. I feel very discriminated against by this bank and I am looking for a new bank I hope they know that.

[David]

The banks may be out of control, but, by and large, it is their consumers and customers who have no self-restraint or desire to properly manage their acccounts that give them the fodder to gorge thmeselves on the overdraft fees and other penalties. "Like shooting ducks in a pond", someone once said. The Feds can do all they want to save these people from themselves, but I'll bet a dime to a dollar there's also correspondiong legislation that somehow allows the banks to "protect" temselves and their depositors, and that means "you mess with the banks and you will pay big bucks for it".

[MadMom]

National City / PNC has another trick -- running the biggest transaction through first. For example, my son (college age, I watch his account online, but he has a debit card) had four transactions run through that would end with him $18 overdrawn. The balance was $52 and the transactions were (approximately)$3,$8,$7, and $55. The transactions ran in order of dollar amount. This resulted in the $36 charge being taken on the first one, with $36 being more than the sum of the rest, so he was hit with four $36 overdraft fees. Had the transactions been run in order of occurrence, he would not have been overdrawn until the biggest and last one hit, resulting in only one $36 overdraft fee. And I did verify the order in which the charges occurred so know that this is the case. THAT is dishonest and should definitely be stopped.

[rudie]

Two words.
Credit
Union

[Scott]

This article makes an incorrect assumption based on a technicality in the payment system as it pertains to debit cards. In the example where the young Mr. Cicero uses his debit card to purchase fuel, the article infers that the overdraft protection on the account is to "blame" for the fees. Actually, if the overdraft protection were not present, the accountholder still would have overdrawn his account due to the way that fuel purchases are authorized.
When a fuel purchase is made at a "pay at the pump" device, the total amount of the purchase is unknown until it is submitted to the credit card company for payment. Therefore, a $1 authorization request is made - so long as the accountholder has $1 in their account, the device allows the consumer to pump their fuel. It is not until later (sometimes days later) when the transaction is presented for payment to the bank that the balance is reconciled. If the consumer spends more than they have in their account a negative balance occurs.
Of course, banks created overdraft protection as a product to generate revenue, but what it replaced was the electronic equivalent of returned check fees, which are sometimes levied by multiple institutions involved in the transaction. In the example cited in this article, if the consumer did not have overdraft protection (which certainly is within their rights), the fuel purchase would have still caused an overdrawn situation, and different types of fees, the aggregate of which is often greater than the fee from their own bank if they have overdraft protection.
It is easy to demonize the financial institutions with examples such as this, and there is no argument that there are some that deserve the attention. What consumers will eventually learn about the new credit card reform bill is that, like other knee-jerk actions taken by our government to pander to public opinion, the bill will limit banks' powers to levy fees on consumers based on their type of behavior (overdrafts, late fees, etc.) so the cost to the system created by these people will be spread across all consumers using the system. This is why consumers are getting notices in the mail about Annual Percentage Rate increases on their credit cards. The actions of a few are being paid for by others.

[JLD]

National City is terrible. I opened an account with them for the express purpose of handling an annual wire transfer from abroad. The account would not have more than $20.00 or so in it until the annual transfer were received. They knew this when I set the account up and I expressly asked if there were going to be charges on the account and was told No. This was not so. They charged an "inactivity fee" of $10.00. However, since they only sent a bank statement every quarter, they had taken the entire account before I knew anything about it. When I got the statement and went in to check on it, I was told the account had been closed.
Essentially, they stole my $20.00. I said exactly this to the rep. Of course, he didn't care. I consider it a cheap lesson learned. I'll never go back to that bank again. They are rapacious in my opinion. I strongly recommend the same to others.

[Necessary EVIL]

I will spare you all my stories of being screwed over by the big banks. I will tell you though, that now is time, more than ever, to pay off your credit cards ASAP, and never use them again. The vultures are circling and waiting for any reason to get you. As far as debit card fees go, there is no other answer than to have WAY more than enough in your account. I know that there are people on here that are in situations where this is just about immpossible right now, but you must figure out a way to do it!

[ohiojim - Columbus]

A wise man once said: Blessed are the banks and insurance companies for they shall inherit the earth.

[Sandy]

Every single one of my credit cards increased their rates to approximately 19%, and this from cards where the rates were at 7 - 10%!!!! This has nothing to do with me paying on time, I do. This has nothing to do with paying late, I don't. This has to do with credit cards increasing their rates before the Dec or Feb deadline.
As to banks, I bank with Huntington and have never had a problem. I pay $25/year for a $2,000 line of credit. If I overdraw my account, the amount necessary to cover is transferred. No overdraft fees and an interest rate of 8%. I sometimes end up paying $1.25 in a month for the ability to use this source of funding. This would not protect me from my own teenage children, it appears, but it sure works for me.

[Sandy]

jed wrote:

I am trying to get a loan, and was told by my bank, US Banks, that they only like doing business with customers who have a credit score of 620 or above. So, my credit was good enough for you to open an account, to get my money in your bank, but not I am not a good enough person to give money to, even though I have been a good and faithful customer. I feel very discriminated against by this bank and I am looking for a new bank I hope they know that.

I'm thinking if your credit score is below 620 you have been determined to be a poor credit risk. That has nothing to do with depositing YOUR money in their bank, it has to do with the probabilities of you paying back THEIR money in a timely and regular fashion. If mortgage companies had paid better attention to credit scores and limited loans to those with good ones, the foreclosure mess may have been mitigated. sorry.

[Dormant account fees]

I deposited money in a mutual savings bank many years ago. I figured compounding interest would make my money grow. I moved and forgot about the account because one, I NEVER get 1099 statements, Two, I never get an accounting of any interest or anything from the bank. The bank in Delaware, Ohio found me and told me they have been stealing my money for years through dormant account fees. I give them my money to loan out and they treat me like this? I am outraged. And when I ask for an accounting they tell me in the most arragant way that they have the right.
I noticed Discover Card is going to charge dormant account fees also if you don't use their credit card. What if I don't want to use my credit card and pay with cash? What if I want to use another credit card that has a more competitive opportunity for me as a credit card user?
They shouldn't be able to do this AT ALL!
Greed will get them.........

[MIKE]

said for 50 years nothing more crooked than banks and insurance companies

[ramsyjames]

Republicans have criticized the proposed agency...TYPICAL REPUBLICANS, If there are any proposals that will cost the banks profits, you can bet which side the r's will be on!

[tom the traveler]

Ok, banks stink. Let's have a "public Option" bank. You know like Fannie Mae, Freddie Mac. They will be so much better.

[M and T Customer]

M&T Bank, a regional New York state bank that is currently expanding, is also notorious for this kind of thing. They structure the billing cycle and the timing of charges to maximize the collection of overdraft fees. The legislation to outlaw this form of outright robbery can not come soon enough! It would seem to me that these banks are HURTING the recovery of the American economy siphoning off money that can otherwise be spent in the "real economy" rather than sucking our money into the vortex of hidden fees and, ultimately, back into outrageous Wall Street salaries and dividends....