Students reflect on Bank of America’s new overdraft policy

Starting Oct. 19, Bank of America and Chase, the two largest bank companies in the nation, will be changing the way customers deal with overdrawing from their checking account.

Normally, consumers are slammed with fees once they overdraft from the ATM or write a check for money that is not in their account. However, Bank of America and Chase are lowering charges for those who do not opt out of their new policy that will be implemented in a few weeks.

With these fees adding up to billions of dollars for the banking industry every year, this change comes as the lawmakers and regulators in the nation’s capital push banks to reform charges that consumers are not aware of. The Federal Reserve is currently contemplating whether to require banks to get customers’ permission before they are automatically registered in these overdraft protection programs. For now, however, Bank of America members will be involuntarily signed up for this program starting Oct. 19.

Bank of America and JPMorgan Chase are undergoing drastic changes throughout their companies, specifically debit card programs. The banks are currently lowering and eliminating many fees, as well as allowing customers to choose whether they would like to utilize their new program called “Overdraft Protection”.

T.J. Crawford of media relations from Bank of America is optimistic about this new policy.

“We think that customers will be really receptive to it. It’s part of a larger effort by Bank of America to provide customers with more choice, which is also important in the current economic environment,” Crawford said.

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1 comments

Joe

Wed Nov 18 2009 18:05

“I mean, what are you going to do?” DeAmicis said. “When you overdraft, you have to pay the consequences. That includes paying the money. I think it’s fair.”

Oh really? Fair? What is an overdraft fee really? The bank is advancing you a LOAN which you have to pay back in five days. Assume the worst case scenario, you go over by ten dollars. The bank loans you the ten dollars to cover the overage plus charging you INTEREST of $35 for a five day loan, which annualized gives an APR of 25,000% or so. That seems FAIR??

Please, the smart thing to do is to OPT OUT of overdraft protection, as when you try to use your card for a point of purchase or at an ATM it will decline the transaction if you have insufficient funds. You could still bounce a paper check and incur the consequences, but you should really be paying attention anyway. (plus in my observation, most students don't write checks for most transactions these days)

A recent Washington Post article said banks will make about 38 billion dollars in overdraft fees this year.. Gee, ya think they might have been motivated to keep this in place had there not been a public outcry? Some banks didn't even *allow* opting out. Finally enough people woke up.

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