Bob Collins“Don’t do favors for people without asking them,” said Rep. Barney Frank, D-Mass., said at a House Financial Services Committee hearing at which he unveiled a bill preventing banks from enrolling you in a high-fee overdraft plan without your permission.
Most banks automatically allow customers to overdraft their accounts, then charge them $25 to $35 per “infraction.” It’s either that or suffer the embarrassment in public of being told your debit card is no good, banks say. Most banks don’t allow checks to bounce anymore. They pay the check amount and then charge you for it.
But with regulators heading toward new regulations, many banks — Wells Fargo is one — are allowing customers to opt out of the plan.
The legislation also would prohibit banks from imposing more than one overdraft fee a month, or six per a year.
If you knew banks could only charge you one overdraft fee a month, would you be more inclined to bounce a check?
Banks have a habit of coming up with new ways to make up for fees that are outlawed. Free checking, for example, could disappear, the New York Times reported this week.
What’s your experience with bank fees, including overdrafts? Answer below.
