B of A Ends Overdrafts on Debit Cards

I'm pretty shocked that this wasn't already standard operating procedure for consumer banks, but Bank of America announced that they will no longer authorize debit card purchases if there isn't enough money in the customer's account. ATM users who attempt to withdraw more than their available balance will have to agree to a $35 overdraft fee prior to completing the transaction.

The move is in response to the coming overdraft fee regulations which take effect on July 1. I guess up until now, BofA customers have been able to overdraw their checking accounts with debit card purchases. I kinda thought the whole purpose of a debit card was that it wasn't a credit card, and that it was limited to the funds the customer had on hand.

Overdraft fees amounted to $1.77 billion in revenues to the banks last year, and the FDIC estimates that 41% of that number was a result of point-of-sale overdrafts. That's a big chunk of change.

 

Thank god. Not knowing this was actually allowed, I was out of the country for an extended period of time once and my auto-debits to Netflix and Zipcar overdrafted me (I just assumed they'd tell me there was a "problem" with the payment and I'd sort it out when I got back). By the time I came back, I was ~$300 in overdraft. I just told them to go fuck themselves and never used the account again. They never got a dime from me for it.

 

Brilliant marketing on behalf of B of A. You could never overdraw your account with a debit card anyway. Notice how they don't mention a word about the true money maker - regular checking account O/D fees, it's $35 per item and after 5 days you get charged another $35. Even if it is a mistake, it takes B of A a good week to fix it and refund your money.

 
lg0718:
Brilliant marketing on behalf of B of A. You could never overdraw your account with a debit card anyway. Notice how they don't mention a word about the true money maker - regular checking account O/D fees, it's $35 per item and after 5 days you get charged another $35. Even if it is a mistake, it takes B of A a good week to fix it and refund your money.

Dude, next time try reading the article before you write something completely false. Everything single sentence you wrote in your post is wrong.

That was the whole point of the article, that you will not be charged with overdraft fees anymore, unless you are at an ATM and the machine asks you if you want to pay an overdraft fee, because FYI that is the new regulation that says "a bank can only charge an overdraft fee if its asks the customer prior to charging that fee for that particular purchase." And that is only possible to accomplish at the ATM, since a bank can't call you up while you are at the cash register in a supermarket..

 
Best Response
Edmundo Braverman:
Overdraft fees amounted to $1.77 billion in revenues to the banks last year...

I would estimate that BAML only saw 10% of that (market share of US deposits), so they got ~$177mn in revenues. That is not even going to put a dent into their earnings. And the only people that will end up losing jobs are the middle class commercial bankers/tellers/staff/shop closings/etc. While the investment bankers don't get affected by this new law.

This law is a big screw up anyway (so don't get too happy); the banks will find a way to make up for the lost revenue. They will probably go away with free checking or start charging for stuff like getting your statement mailed to you/inactivity fee (minimum no. of transactions required)/lower interest on savings or CDs by a few basis points/etc.

The responsible and those who keep a safe cushion are the ones who are going to pay to offset this new regulation, while the serial abusers/dumbasses who have themselves to blame are going to benefit (I admit that I paid the o/d fee many times myself but I am not blaming the bank unless it uses some funky "financial engineering" - hallo Wachovia - that shows that I o/d when I shouldn't have, but that is a whole different story).

I hate these democrats, they have no f*cking brains. They are too shortsighted and can't see the big picture, EVER!

 
stk123:
Edmundo Braverman:
Overdraft fees amounted to $1.77 billion in revenues to the banks last year...

I would estimate that BAML only saw 10% of that (market share of US deposits), so they got ~$177mn in revenues. That is not even going to put a dent into their earnings. And the only people that will end up losing jobs are the middle class commercial bankers/tellers/staff/shop closings/etc. While the investment bankers don't get affected by this new law.

This law is a big screw up anyway (so don't get too happy); the banks will find a way to make up for the lost revenue. They will probably go away with free checking or start charging for stuff like getting your statement mailed to you/inactivity fee (minimum no. of transactions required)/lower interest on savings or CDs by a few basis points/etc.

The responsible and those who keep a safe cushion are the ones who are going to pay to offset this new regulation, while the serial abusers/dumbasses who have themselves to blame are going to benefit (I admit that I paid the o/d fee many times myself but I am not blaming the bank unless it uses some funky "financial engineering" - hallo Wachovia - that shows that I o/d when I shouldn't have, but that is a whole different story).

I hate these democrats, they have no f*cking brains. They are too shortsighted and can't see the big picture, EVER!

what the hell are you smoking dude? serial abusers? you are making overdrafting seem like collecting welfare checks for 5 years. overdrafting on debit cards is bs, everyones gotten hit with it at some point and complained b/c it is in fact bullshit. who the hell wants to get charged $36 for a bottle of water? "protection" my ass

there should be consumer protection laws period. Please do enbellish on the "financial engineering" that you got hit with, but didnt complain about b/c you are such a supreme capitalist

 

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