After my thread on Bank Fees thought I would post some firsthand info on it all

[The Straight Story]

I spent 5 years at Chase/Bank One running their data centers (well, the Core centers for BankOne here in Ohio and then the Mortgage center for Chase after Merger). I touched all parts of the business day in and out.

About fees/checks clearing/etc (and note, none of this violates my non-disclosure agreement as I am not giving away anything proprietary).

1. "Transactions after 3pm today will be considered next days' business" - what does that mean really?
- You can deposit a check before 3pm and it will be considered today's business, but that does NOT mean it will POST today. Big difference. And they can count on people not realizing what that means. That receipt you are holding showing your deposit, and that sign showing that it will be today's business really does not mean much.

2. What happens when you spend money on your debit card? You go to gas station. You have, you think, 100 in your account and you spend 20 in gas. Now, it has been a week or so since you carted around your spreadsheets or checked online for balance, checks cleared, what your spouse may have put in, etc and so on. You drive on down the road and hit the ATM before you buy some groceries. Shows you have 100. So you spend 85. I mean, you checked your balance right and the bank spends millions on high tech systems.

Then you find out you were overdrawn. Why? Because the gas station did check your account, the bank saw it, but the merchant won't do their processing for 3 days. So your account - technically - DID have that money in it, but then the merchant and bank reconcile and bam - you are over by $5.

-Now here is rub on that. That all expect you to know, 24 hours a day, where every dollar you and your SO have but they themselves don't do the same. They will tell you have X when you have Y and then fine you for not keeping up on your balance - something they can do in seconds but choose NOT to do because they can make money off of you not knowing.

3. One issues I recall - one night, at around 10pm, I got a call from my boss. HUGE issue. $784 million dollars was not transferring from our bank to one out in CA to cover payroll. Now this may sound simple - but such a transfer is not all about actual payroll. There is info about each person and their pay, info about their 401k deposits, taxes (year to date, this paycheck, etc), bonuses, direct pays they have (child support, etc), and so on. So that 784 mil was not all actual money, it was a total impact across the board.

If that info was not there by 6am (it took hours to transfer all that data, verify it, then had to be processed on their end) then there would be people who did not have their paychecks on time. Which would mean bounced payments for direct pay - AND that is the key here. Banks will pay out certain things you set up to be paid, at a certain time, and deduct your account and credit theirs (like mortgage, credit cards, utilities, and so on). If you miss those auto payments - you get bounce fees, late fees, etc.

So what you might say? Point is banks CAN and DO on a regular basis transfer huge amounts of money and move it about between each other quickly - especially when it is between other banks and is a large dollar amount.

They CAN do the same for you and your checks you deposit. They don't. Because they make money off delaying it and hiding those delays under a mound of hard to understand language.

4. When I worked a temp job doing programming last year at Verizon I would take my checks to a check cashing place. Small fee, instant cash.

You know what they did? Right there, as I waited, they were able to check to see if the check was good and could cash it right then. You think banks can't do the same? They can. But they make more money off people by not depositing such checks right then into your account - because they know some folks won't understand the delay and think they have the money in their account and then go spend it.

THE BIGGEST THING HERE THOUGH IS THIS: The banks are not out money in all of this - they could instantly credit your account, but they wait - they still get the money from the other bank (the one your check was written on). Those 24-72 hours they wait? They make interest on - they make money on your money. And if you buy something after depositing your money - and it was 'not in your account' then they will kill you with fees and make even more money.

[hobbit709]

1. I've known that for years.

I had one bank where I made a CASH deposit at 9AM on a Monday. They bounced a check that came in at noon on Tuesday. I raised a squawk and they made good, then I closed my account. That bank is no longer in business.

[truedelphi]

2. The irony for me, now that I know so many here on Food stamps is this -

You can call the Food Stamps center any time day or night and find out to the penny what your balance is. To the penny! How is it that their IT specialists are able to do that, and the banks with all their bucks cannot? Something suggests it is not the IT people who are being incapable of pulling this off for the banks.

So the notion that the banks cannot telly ou your balance is stupid. At one point in time, the ATM machine told me I had one balance - the call center another, and the bank teller told me another amount! All within ten minutes of my inquiring.

[sandnsea]

4. And you can't overdraft your food stamps either n/t

[sandnsea]

3. 45% of banks make more from bounce fees than banking

And that is why they intentionally do everything, and more, that is in the OP's post. It is the equivalent of high-tech pilfering. Thank you.

Banks not making money on primarily on banking anymore - that should scare the pee out of people too.

[truedelphi]

8. Oh I know about their intentions. Like I said, it is so ironic

That a government program provides this "Courtesy" of letting a person know their balance of food stamps remaining, while a bank, that already profits from a person anyway (even if only in the form of use of their money while it sits in their cyber bank vault) doesn' t provide anything in the way of true information.

The saddest thing about the 45 Billion that the banks make off of bounced checks: since some 65% of all Americans never bounce even one check, and another twelve per cent only bounce on or two checks a year, the majority of that cost affects only the very poorest of Americans.

[brewens]

5. I recently had an online citicard payment bounce.

It was my fault because I just forgot to transfer money to the account that payment comes out of. I noticed it a day or so later. I had an alert on the citi website and went to fix it. Just move the money and make the online payment again, right? Nyet so fast! They blocked me from making online payments for this.
I call their 800 number to try and get it straightened out. I told them the easiest way would be for them to unblock it so I could pay and we'd be square. Nope! Can't do that. I said that if you can block it, you can unblock it, you have IT guys, that's what they do. Nope! I had to send them a check and when it cleared they would enable online pay again.
What a pain in the ass! I don't use checks. I don't even have any. I have a checking account but I do everything online or with my debit card. I sent them the payment and got it taken care of. Being a seven year customer that had never missed a payment they even wiped that off and the late payment fees. I have to give them credit for doing that.

[msongs]

6. lol those 3-5 day holds on checks you deposit? they get it instantly and make interest, only YOU are

stuck waiting 3-5 days and it was YOUR paycheck.

Banks are evil and criminal. Let's bail them all out.

Msongs

[baldguy]

7. Paper checks can and do take up to 10 *business* days to clear.

That's two weeks in human terms. Local checks normally clear sooner; out-of-state checks clear later. Note that "clear" means that all of the funds from the check are available for you to use. And even after a check clears, if the bank subsequently learns it's fraudulent or NSF they'll take it out of your account and charge you a fee. Whenever possible, cash the check and deposit it as cash before the bank's cut-off time. It'll go on that days' business and be available the next business day.

When using your debit card, make sure you have money to cover the transaction. Legally, the merchant can't hold funds on your account for more than three days. After that the funds will become available to you again. That doesn't mean you can spent it! You still have to pay the merchant for your purchase. They're supposed to transmit the transaction to the bank in 3 days' time, but they aren't required to. In fact they actually have up to a year to do that. And yes, that means you actually have to keep track of what you've spent & what you have in your account yourself!

And balance it once in a while.

Also, the merchant can place a hold on your account for almost any amount they wish. A gas stations will normally hold $1 just to make sure the account is active & open. Retail stores will normally hold the exact amount of the transaction. Car rental agencys, restaurants & air lines will normally hold double the expected charge. If your deposit account can't take that, use a credit card.

Always remember that the banks are corporations. They exist ONLY to make a profit. And that profit comes from YOU. If you take a little responsibility for your finances, you'll reduce the amount of banking bullshit you'll have to deal with.

[Yavin4]

9. I Built My Own Database That Tracks My Every Transaction

I know what I have in my checking account at all times. I use to pay a fortune in fees, but after I started using my database, I have not paid a fee to my bank in over 5 years. I'm never overdrawn, and I'm never late on payments. I also do not use ATMs outside of my bank which also saves on fees.

You are correct that certain charges from merchants will show up one day in my account. Then it will disappear, and then re-appear. However, I track it as soon as I make it, so I know that it's there. I have my own reconciliation table in the database, wherein I compare my balance to my bank statement. I also know what checks, deposits, withdrawls, and debits that are outstanding and I use those amounts in the reconciliation.