The most profitable source of income for banks? Overdraft fees • Hacker News Board

Re: The most profitable source of income for banks? Overdraft fees

#151

Post by Touche » Tue, Aug 25, 2015, 2:55 AM UTC

geofft wrote: post #146

Touche wrote: post #91

Earlier quoted context omitted.

> Off the top of my head, I see "dissuading behavior that negatively impacts the bank", and that doesn't seem to justify a fine in this case, but maybe you're thinking of a rationale for a fine that I and maybe others are not thinking of. Great! Someone that wants to participate in reason and not just boisterous proclamations. I'm down. So yeah, I agree with your definition and it applies in this case because the ban…

So a couple of things: 1. Why can't the bank refuse to process the charge? 2. This seems to be failing, in practice, at dissuading people and making them pay attention to keep a positive balance. At least according to a couple of comments here, there are people who are repeatedly hit by overdraft fees. Is there something better that can be done do solve the actual problem, which is banks having to come up with money…

Oh, you're under the illusion that a for-profit business' primary responsibility is to maximize the value they provide to their customers? Sorry but that's not the way the world works. Now that could possibly be the case if we lived in a country where banks were allowed to compete on things like "treating the customer right" but we don't live in such a country; we live in the one where ever more annoying fees is the only game in town.

But none of this is relevant from your (and my) point of view; ours is really simple. We're completely aware of the murky rules that apply when your account gets close to $0 and the best solution is to not use the account in that case.

Re: The most profitable source of income for banks? Overdraft fees

#152

Post by Touche » Tue, Aug 25, 2015, 2:56 AM UTC

danharaj wrote: post #90

Touche wrote: post #73

Earlier quoted context omitted.

> Do you not see anything morally and ethically wrong with this? That's not the language the person I was responding to used.

They don't have to because most people know that powerful institutions tend to act in bad faith in order to extract as much gain as they can from the vulnerable.

Yes! We do know this. Which makes getting screwed a highly avoidable situation.

Re: The most profitable source of income for banks? Overdraft fees

#153

Post by nulltype » Tue, Aug 25, 2015, 2:58 AM UTC

tsotha wrote: post #101

nulltype wrote: post #86

Earlier quoted context omitted.

I guess the counter question is why is USAA only available to military members?

USAA isn't a bank, it's a credit union. It's "field of membership" is uniformed military and their families.

Can anyone recommend a credit union as good as USAA that accepts people unaffiliated with the military?

Re: The most profitable source of income for banks? Overdraft fees

#154

Post by jschwartzi » Tue, Aug 25, 2015, 3:05 AM UTC

nulltype wrote: post #86

mbrameld wrote: post #47

Earlier quoted context omitted.

Why do you think it should be?

I guess the counter question is why is USAA only available to military members?

It's a very low risk group of people compared to the general populace.

Re: The most profitable source of income for banks? Overdraft fees

#155

Post by polm23 » Tue, Aug 25, 2015, 3:14 AM UTC

mikekchar wrote: post #84

pyre wrote: post #55

Earlier quoted context omitted.

> The last time I tried to rent a room at a hotel in Canada, they would not accept cash -- credit card only. This has more to do with the hotel's liability. If you steal from the hotel or damage the room, they will apply those extra charges to your credit card. Even if your credit can't cover the costs, your verified credit card information tells them that you didn't provide a false name, and they have someone to cha…

I live in Japan now. In Japan they take a photocopy of some ID containing your address for that purpose. My understanding is that the reason hotels want a credit card is that they pre-charge it with a deposit and then refund it when they check the room. You never see the pre-charge transactions so you don't know about it. I have successfully negotiated with some hotels to take cash by offering them a cash deposit. So…

If you change your mind about having a card, ANA cards are relatively easy to get for foreigners.

Re: The most profitable source of income for banks? Overdraft fees

#156

Post by Retra » Tue, Aug 25, 2015, 3:16 AM UTC

fredkbloggs wrote: post #99

cookingrobot wrote: post #54

Earlier quoted context omitted.

They're not asking for a loan, they're asking to withdraw their own money that they put in the bank. The bank deliberately chooses to turn this into a loan if they accidentally ask for more than is currently there.

Let's talk about the word "accidentally". Suppose I drive to a bar, have three beers, and drive home. I don't bother to check my BAC; I just assume I'm below the legal limit and can drive safely. On the way, I accidentally run over a budding young Progressivist on the street, who then dies. When the sheriff shows up, he finds that my BAC is 0.09 -- just over the limit! Surely, you will agree that any penalty I am ass…

Except, in your analogy, you are being force-fed alcohol by your landlord, car insurance laws, gas stations, any children you have, public dress laws, ISP, electric company, phone company, and the biological need for food.

This puts your default BAC at somewhere between .06 and 0.085 at any given moment. Now if you go over 0.09, do you think maybe that might happen on accident?

Re: The most profitable source of income for banks? Overdraft fees

#157

Post by fredkbloggs » Tue, Aug 25, 2015, 3:16 AM UTC

themartorana wrote: post #125

fredkbloggs wrote: post #111

Earlier quoted context omitted.

I'm trying to provide something other than Progressivist claptrap, in the desperate hope that some young people will read this and understand that there's more than one viewpoint in the world, and that some of them actually treat people like human beings rather than victims. As for the substance of your complaint, I do not agree. Yes, I can certainly imagine various excuses. I can also imagine accepting that mistakes…

Sounds like what I assume bankers tell themselves to sleep at night. Ya know - they're adults that should have known better. $50 is a modest fee to charge for teaching them a lesson. They should thank me. If they just got a job and stopped being poor, they wouldn't be in this situation to begin with. Takers.

I doubt very much that they care enough to tell themselves anything, and I'm sure they don't lose any sleep over it. You're making this way too personal; they just want money. They don't care if you learned a lesson, if you're rich or poor, if you're a taker or a maker, or if you feel grateful or hateful. They care about their $50, because those fees are profits and profits keep them in the corner office where they can bilk the shareholders for hundreds of millions while paying squat for dividends. Nothing else.

Re: The most profitable source of income for banks? Overdraft fees

#158

Post by orangecat » Tue, Aug 25, 2015, 3:16 AM UTC

fredkbloggs wrote: post #111

mbrameld wrote: post #70

Earlier quoted context omitted.

You can't imagine a scenario where a responsible adult has had a checking account with a balance over $5000 for many years and has never run in to the charge for dropping below that level, eventually forgetting about that $5 fee? Now if you managed to picture that and believe it's possible for a responsible adult to forget about an obscure fee his bank has never charged him before, try to imagine your home's AC goes…

I'm trying to provide something other than Progressivist claptrap, in the desperate hope that some young people will read this and understand that there's more than one viewpoint in the world, and that some of them actually treat people like human beings rather than victims. As for the substance of your complaint, I do not agree. Yes, I can certainly imagine various excuses. I can also imagine accepting that mistakes…

I'm a libertarian and support free markets; please stop making us look bad. Reordering transactions to maximize fees is flat-out fraud. It's not anything any reasonable person would expect, even if it is detailed in a 6-point font on page 63 of the "contract".

Re: The most profitable source of income for banks? Overdraft fees

#159

Post by yohoho22 » Tue, Aug 25, 2015, 3:17 AM UTC

mikekchar wrote: post #66

noonespecial wrote: post #3

Earlier quoted context omitted.

The most egregious example that has happened to me: I had a checking account with a hidden $5 fee if the balance went below $5000 in a given month. I made a big purchase, left the account with about $3 in it and scheduled a transfer from savings for the next day... you know how it played out: $5 fee on the low balance, $50 charge to "borrow" the $2 all taken from the transfer the next day. They call that a "service".…

I once had a bank account with $100 in it. I went travelling and didn't access the account for a long time. Eventually, I returned back and found that they had sent me a letter saying that they had close my account for inactivity. The fee for closing the account was $120, which put the account at -$20. They were further charging me a $75 overdraft fee and informed me that my account was in arrears for $95 dollars. I…

Did failing to pay up not put you in the bad graces of ChexSystems? Did it affect your ability to open other accounts later on?

Re: The most profitable source of income for banks? Overdraft fees

#160

Post by jkestner » Tue, Aug 25, 2015, 3:23 AM UTC

Karunamon wrote: post #129

jkestner wrote: post #121

Earlier quoted context omitted.

Don't forget to read all your EULAs! Not everyone can afford to educate themselves on every consequence of every interaction with a corporation that is actively trying to obscure those consequences. I'm generally not ignorant, and I naively thought last week that if I transferred some money into a checking account on the same day that a payment was taking the balance below zero, I'd end up positive when the transacti…

See, this is an instance of the bank clearly being a dick, for lack of a better term. The money was there, you were being responsible, you still got dinged. This is wrong. Now, how much do you want to bet that's not the case on some high-90s percentage of overdrafts? The comparison to EULAs is specious at best. It's not like it's some legalese small print buried halfway through a lengthy document - they're disclosed…

I think the EULA comparison is valid because in my case, the rules that explain that behavior (perhaps a transfer from another bank may take "1-3 days to be accessible") are also probably written somewhere, but the overall amount of noise, added to the noise of my daily worries, means that I'm likely to miss it.

I'm not going insert into the conversation a guess of what percentage of overdrafts are fair/unfair. I agree that many overdrafts are the exclusively fault of the account holder, but I tend to grant leeway when the bank has a general history of "being a dick."