BofA to end overdraft fees on ALL debit card purchases (this summer).

[Statistical]

Bank of America said Wednesday that it plans to ditch overdraft fees on debit card purchases this summer. The Federal Reserve recently announced new requirements that are slated to go into effect in July. But the Charlotte, N.C.-based lender's move goes one step further.

The Fed's new rules will prevent banks from automatically enrolling customers in overdraft protection programs, which charge fees when consumers spend more than they have in their accounts. More than 75% of banks automatically sign customers up for overdraft programs, according to a study by the Federal Deposit Insurance Corp.

With the bank's new policy, BofA (BAC, Fortune 500) debit card purchases that would push checking account balances into the red will be declined for new customers beginning in June, and for existing customers starting in early August.

....

For customers who attempt to withdraw insufficient funds at one of Bank of America 18,000 ATM machines, BofA will alert them that a $35 overdraft fee will kick in if they continue and ask them to confirm or decline the transaction.

"Our customers have been clear that they want to know if a purchase is going to overdraw their account," said Susan Faulkner, BofA's deposits and card product executive, in a statement.

...

Not all overdraft fees are going away. BofA customers will still be charged for bounced checks and for payments that are automatically withdrawn from their accounts without sufficient funds.

--------------------------------------------

http://money.cnn.com/2010/03/10/news/companies/Bank_of_America_overdraft_fees/


Never thought I would see the day. They still lost me for life (I love USAA Savings bank and I love that it is responsible to members not shareholders) however this will be good news for some people.

Hey Susan you idiot. Considers don't want to "know if they are going to overdraft" they simply do not want to overdraft.

Also there is more info in article on other big banks (JP Morgan Chase, Citibank, and WellsFargo).

[PVnRT]

1. Aren't they supposed to?

At least, they're supposed to ask if you want the overdraft scam ripoff protection.

[Statistical]

2. They have that option.

However many credit card companies are simply opting out of overdraft all together.

The compliance issues make it not worth it. A mixup or lost paper trail could open the company up to lawsuit (allowing overdrafts for wrong accounts).

My credit card no longer has any overdraft fees. They will allow a "free overdraft" depending on the amount of the overdraft and credit history.

[Statistical]

3. Kick. Nobody is glad overdraft fees are going away thanks to the Democrats?

[Imajika]

6. It is probably a good thing...

Let me tell you though, an awful lot of people are going to be pretty upset.

I worked at a bank for quite awhile years ago and people mostly wanted their overdrafts covered at almost any price. They don't want to be declined. Only a small minority of people were racking up the huge fees (lots of overdrafts at once) you'd read horror stories about. Most people would maybe have 1 overdraft every few months or so, pay the insane fee (used to be 29.00 when I worked at the bank) and were pretty happy they could overspend without being declined. The main thing is the customers want what they want, when they want it, and they do not want to be declined. So even with the ridiculous fee, they were mostly happy.

In theory, everyone wants to punish the banks and have their fees reduced. Wait till many find out that they simply won't have overdraft protection available to them though.

Overall, this is probably a good thing though. Same way as outlawing insane rates on credit cards will be. Yes, some consumers simply won't be able to get a card because no one would offer them credit with anything but a criminally high rate, but really, they shouldn't have credit cards anyway. The government steps in on issues like this and sometimes consumer choices will be restricted a bit, but for the overall good sometimes you just have to make certain things unavailable to people since they will almost always abuse or screw up with them.

[Midlodemocrat]

4. This makes no sense.

I am a B of A customer. My daughter has a B of A college account. The 'hold' on the account for a purchase is for 24 hours. After that, it drops off.

So for example. You check your balance and you've got $20.00 in there. You decide to hit Chipolte (not me, think the college student) for a grand total of $9.80. So, the card is swiped and you have a balance of $10.20.

However. The hold on the $9.80 drops off after 24 hours, so if you are like most kids or a lot of adults, you check your balance a couple of days later and lo and behold! You've got $20.00 in that account. So you proceed to spend $20.00 and the card is not declined.

You do however, incur overdraft fees because the account is actually in the red.

I know. I know. People are going to say that you should keep up with the register, write it down, blah, blah, blah. Well, the convenience factor of the debit card tends to outweigh all that especially if you're juggling a cranky toddler and a gallon of milk.

IMHO? The hold should stay until the paperwork is in place. Because Lord knows, if the reverse was true and you were waiting for a hold to drop off because a charge was being disputed? You're waiting for days.

Unless you have overdraft protection linked to your debit card? How in Hell are purchases being approved if you don't have the funds?

[Imajika]

5. Not so sure about that...

"IMHO? The hold should stay until the paperwork is in place."

The holds drop because of mis-swipes, charges processed incorrectly (charged for a more expensive room or seat), holds that were actually far more than you really paid for an item (this can be places like gas stations, hotels, airlines), etc, etc. You really don't want the holds to stay on more than 24 hours.

The paperwork should only take 24-48 hours to put in place anyway. Your daughter needs to keep track of what she spends. With the new policies in effect, it sounds like she would not be charged an overdraft fee if somehow she is able to charge something she doesn't have the money for due to hold issues. If they charge her, she can probably get it reversed since it seems it would violate BoA's new policy. Either way, she really needs to keep track of her purchases. I fail at that too and need to do the same.

[Midlodemocrat]

7. Except when I had a credit coming? For a purchase that didn't go through

because there was a glitch with the company, not me? Took 7 days for the hold to drop off.

And it was a sizable amount >$500.

Seriously doesn't make sense.