Regions is latest bank to change their overdraft policy

October 1, 2009 by · Leave a Comment
Filed under: Policy News 

With the public learning that the bank industry made $38.7 billion dollars in overdraft fees that falls disproportionately on the lower income individuals.  I hope to see these policies rolled back at all banks.  It seems very predatory on how they let you go over your limit even if you do not have overdraft protection in most cases.

I personally found this out when I inquired on a transaction that was a debit, I did not have overdraft protection so I inquired on why you would let me take more money out on a debit card, even if I did not have the funds available.  I was informed that they do these to save me from embarrassment of having a declined card at the point of sale.  Being that they charge you daily and it takes a couple days to let you know you have over-drafted, it is likely you will have a $100 penalty assessed by the time you get your first notification.  That in my opinion is a predatory policy that is used just to generate fees for the bank.  I applaud the banks that are taking steps to stop this practice.

AP, Birmingham – Regions Bank on Thursday became the latest bank to ease its overdraft fees and policies, as federal scrutiny intensifies over the programs.

However, the Alabama-based company said it will continue automatically enrolling customers for overdraft protection — the key practice that has come under fire in recent months.

Last week, Bank of America, JPMorgan Chase, U.S. Bank and Wells Fargo said they would no longer automatically enroll customers for overdraft protection.

Consumer advocates say automatic enrollment is misleading because most people assume they can’t spend more than they have with debit cards, so they might not realize they’re overdrawing their accounts when transactions are approved. They also might not realize steep penalty fees for doing so are piling up, advocates say.

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