So, I was reading the New York Times online about a major problem facing banks. Apparently new regulations being implemented by the Federal Government will destroy a major income source for them. An income estimated to be over 20 billion dollars a year! What could it be you ask?
Could it be income earned from loaning money to buy a home, invest in a business or buy a car? All of these loans would be with credit approval and verification of ability to make the payments on time and without hardship? (Unlike the past approval process used by lending institutions which trashed our economy and slammed us into the crisis we find ourselves in now.)
HELL NO!!
The bank’s potential loss of income is the fees a debit card user is charged when he or she overdraws their account!! These fees are as high as $35.00!! EACH TIME!!!
A major marketing campaign has been launched by the banks to get customers to allow the fees to continue. Apparently they can’t charge you fees without your permission any more. Of course, they aren’t going to cover your overdrawn amount unless you allow them to charge the fees!!
An excerpt from one mailing:
“Your debit card may not work the same way anymore, even if you just made a deposit. Unless we hear from you,” the message, emblazoned in large red type, warns. “If you don’t contact us, your everyday debit card transactions that overdraw your account will not be authorized after August 15, 2010 — even in an emergency,” with “even in an emergency” underlined for emphasis.
Consultants are leaping on this opportunity:
Given the billions at stake, consultants are urging banks and credit unions to hire them to help. “Your fee income will take a substantial ‘hit’ if you don’t start getting consumers to ‘opt-in’ for POS/ATM overdrafts NOW!” Mike Sobba, president of Strunk & Associates, a financial institution advisory service, warned banks in a pitch on the company’s Web site.
Some are even lobbying banks to focus their pitch on the minority of customers who are responsible for the vast majority of overdraft fees. According to a Federal Deposit Insurance Corporation study in 2008, 93 percent of overdraft fees come from the 14 percent of people who exceed their balances five times or more in a year.
Look people, STOP SPENDING MONEY THAT YOU DON’T HAVE!! Good grief, 20 billion dollars profit because you’re irresponsible? Okay, okay, there are emergencies that pop up occasionally. But read the above again about the 14 percent of people who exceed their balances five or more times per year, that’s crazy! Five or more emergencies a year?? NO WAY!!
So, those of you who are dependant on this “service” provided by the banks need to be looking for that notice in the mail ”allowing” you to “opt-in” to behavior that costs you a fortune every year.
Twenty BILLION dollars per year worth of irresponsible behavior.
DON’T DO IT!
The article referenced: http://www.nytimes.com/2010/02/23/your-money/credit-and-debit-cards/23fee.html?partner=rss&emc=rss&src=ig
This poor creature overdrew her account and now lives in a towel!! Please send donations.