The cost to overdraw a bank account could drop to as little as $3 under a proposal announced by the White House, the latest effort by the Biden administration to combat fees it says pose an unnecessary burden on American consumers, particularly those living paycheck to paycheck.
The change could potentially eliminate billions of dollars in fee revenue for the nation’s biggest banks, which were gearing up for a battle even before Wednesday’s announcement. Exactly how much revenue depends on which version of the new regulation is adopted.
Banks charge a customer an overdraft fee if their bank account balance falls below zero. Overdraft started as a courtesy offered to some customers when paper checks used to take days to clear, but proliferated thanks to the growing popularity of debit cards.
I had that happen too with BoA, a long time ago. My initial reaction was “how in the fuck is this legal?!”
Then I nearly blacked out as a torrent of un-forgotten media, of all the jokes, comedic hate, and disparaging sentiment towards banks, flooded back to my minds eye.
Sadly, my only answer to this problem was “make more money”, which really isn’t an answer at all. Later, I switched to a credit union, which I would have done earlier had I known that was an option.
Pretty sure this was (is?) standard practice for every major bank, bc Citizens did the same thing to me. With no regulation, why wouldn’t a bank fuck its most vulnerable customers as hard as possible?
Exactly. What’s worse is that it’s almost justifiable if you consider how a bank makes money: float. If a huge swath of your account holders are maintaining as close to a $0 balance as possible, they’re costing you money to manage all the related overhead. I say “almost” because if they, oh I don’t know, made savings accounts attractive for small timers (say 4% interest on balances below $200), it might not require a collections department to gather forcibly extracted fictitious income.