poisonwood's Diaryland Diary

Date: Sept. 09, 2009 . Time: 8:29 a.m.

overdraft fees Entry:

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overdraft fees

Overdraft "protection" really gets my blood boiling. I have specifically declined this more than once, but I'd be surprised if B of A hasn't signed me up anyway. I would *never* overdraft my account, so the only reason it would be overdrafted would be in case of error or fraud (as happened to me as an undergrad at an AIAA conference). Anyway, I almost never use my debit card these days, since I get miles with my credit card. I actually discovered yesterday that my debit card had been suspended, unbeknownst to me, due to suspicious activity. They apparently sent me a new card, but I get so much junk in the mail from B of A that I didn't notice it, and now I find myself with a lot of purchases I must make and no debit card. I put the fee for the reception on my credit card. However, they put a hold on the sum for several days before actually charging it. You can't pay it off until it's actually charged (not just held), and then once I finally could pay it, it took a couple of days to go through. I basically put the amount equivalent to my credit limit minus a few hundred, which would have been fine if I'd had my debit card. Grumble. There are some things that are just evil, and automatic overdraft "protection" is definitely one of them. Protection my foot.

Bankers say they are merely charging a fee for a convenience that protects consumers from embarrassment, like having a debit card rejected on a dinner date. Ultimately, they add, consumers have responsibility for their own finances.

Um, right. Having just had my card rejected a few times in public (due to the aforementioned supposed security issue), it's really not that embarrassing. And if you're really completely out of money, you're better off making your date pay.

Michael Moebs, an economist who advises banks and credit unions, said Ms. Maloney’s legislation would effectively kill overdraft services, causing an estimated 1,000 banks and 2,000 credit unions to fold within two years. That is because 45 percent of the nation’s banks and credit unions collect more from overdraft services than they make in profits, he said.

So what did they do before overdraft protection?

They will certainly try. For instance, some banks have said they might slap a monthly fee of between $10 to $20 on every free checking account. At the moment, people who pay overdraft fees help subsidize the free accounts of those who do not.

I would like to see them try this. This is where that wonderful thing called competition comes in. Is overdraft protection the reason they've been trying so hard to lure people into getting checking accounts?

Most of the overdraft fees are drawn from a small pool of consumers. Ninety-three percent of all overdraft charges come from 14 percent of bank customers who exceeded their balances five times or more in a year, the F.D.I.C. found in its survey. Recurrent overdrafts are also more common among lower-income consumers, the study said.

As usual, the most vulnerable are affected the most.


8:29 a.m. - Sept. 09, 2009

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to the moon

It's going to be interesting to see what, if anything, comes out of this panel. I doubt the mismatch between reality and rhetoric is any greater on the space program (percentage-wise) than for any other Bush / Obama plan. Though I'm speculating. Anyway, I agree with this:

The panel called "unwise" the Bush plan to shut down the space station in 2015 and steer it into the ocean, after 25 years of construction and only five years of fully operational life. The space station's life should be extended, the panel said.

2:37 p.m. - Sept. 08, 2009

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