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The most profitable source of income for banks? Overdraft fees

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

#171

Post by TDL »

ams6110 wrote: post #135
silveira wrote: post #77

Earlier quoted context omitted.

Civil forfeiture laws in the US. I don't feel safe carrying a reasonable amount of cash. Here the police can just rob me, and now I'm guilty until proven innocent. In DC it costs up to $2500 for the right to challenge a police seizure in court, it's complex, expensive and it can take years.

It rarely happens. Like cops shooting unarmed people in the back, it isn't something that you really need to worry about.

Even if it's (asset forfeiture) a statistically rare event, we have to worry about it because it is a deeply corruptive practice. Asset forfeiture goes against much of the philosophical underpinnings of this nation.

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

#172

Post by vacri »

staunch wrote: post #6

The pain overdraft fees cause poor people is truly hard to comprehend unless you've been there. It's incredibly evil. You've got $16 left for food and then then the Flickr account you forgot to cancel gets charged to your account, putting your balance at -$9. Now you have to pay $35/day until you get enough money to cover the overdraft fees. You end up paying $100+ for a $9 forced loan. The bank could have just decli…

> even though you have overdraft "protection" turned off

If you've explicitly opted to turn off overdraft protection, then the bank should honour that and let the payment through. The bank has no idea how vital that charge is for you. The problem is in the ridiculously onerous penalty.

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

#173

Post by guac »

a3n wrote: post #128
ssimpson wrote: post #38

Earlier quoted context omitted.

USAA also batches their debts and payments differently than other banks, to help their members minimizes any fees incurred. Their customer service saying is "assume positive intent" and they have amazing service. I will probably be a customer for life.

The other day I took a picture of a check that I received, with their phone app. They credited the check to my account immediately . Not "pending," it was in there with no unusual note. I assume it would have been on me in some way if the check bounced, but still. If you're eligible, you should join USAA.

That's standard practice with USAA. My first few checks had a pending status but after that (100s of checks later) they all posted immediately. Same thing happened when I signed up my wife. It's a selling point of USAA.

My paycheck also posts immediately, I get "paid" Thursday while everyone else I work with gets it Friday.

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

#174

Post by darkmighty »

fredkbloggs wrote: post #127
danharaj wrote: post #88

Earlier quoted context omitted.

It's probably because people usually grow out of the stage of political awareness where one imagines human beings to be atoms that aren't connected to one another. If you think that 'personal responsibility' or whatever allows you to judge someone as stupid, inferior, or deserving of misery, then you will have a bias that makes you see people as individuals cut off from all social and economic context because it give…

I don't feel that I'm a weaker counterparty. If I find myself feeling that way in a relationship, I am going to renegotiate its terms or end it. The problem that you Progressivists have is that you cannot distinguish apparent power from real power. A bank may be evil, but its power over you is illusory. You are still free to terminate your relationship with it at any time. Real power comes only from the ability to us…

Going on that line of thought, consumer protection laws, agencies and regulations would be nonexistent. Hopefully not everyone thinks that way.

Also, I never read about progressivism before.

https://en.wikipedia.org/wiki/Progressivism

Can you sincerely say you are not progressivist after reading the introduction?

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

#175

Post by nandemo »

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…

Banks certainly issue credit cards to non-PR foreigners. I got one as a student. My initial limit was very low, though (100,000yen~=1000usd then).

I know people who got refused cards by multiple banks before succeeding. But it's not nearly as hard as getting a home loan, which usually does require PR.

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

#176

Post by logicchains »

Touche wrote: post #144
tdfx wrote: post #114

Earlier quoted context omitted.

As a college student, I am assuming that you didn't have much money, but also likely had rather limited expenses. To the family with children that has $50 to their name, a rent payment, childcare expenses, etc, most of which they can barely afford already, an unexpected overdraft can be the trigger that sends them off a financial cliff. Poor people often make very bad financial decisions. But so do rich and middle cl…

All true, but you can't regulate away bad decisions. By attempting to do so you just make the next scheme even more disgusting.

You can't regulate away bad decisions, but you can regulate away the consequences (by shifting them onto the wider population). Not that I support this, as I believe it unfairly penalises people who make good decisions, but it's certainly possible.

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

#177

Post by nandemo »

staunch wrote: post #6

The pain overdraft fees cause poor people is truly hard to comprehend unless you've been there. It's incredibly evil. You've got $16 left for food and then then the Flickr account you forgot to cancel gets charged to your account, putting your balance at -$9. Now you have to pay $35/day until you get enough money to cover the overdraft fees. You end up paying $100+ for a $9 forced loan. The bank could have just decli…

*> You've got $16 left for food and then then the Flickr account you forgot to cancel gets charged to your account,

I don't want to be rude but I wonder what set of circumstances leads a poor person to subscribe to a relatively superfluous service (unless you're a pro photographer?) in the first place.

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

#178

Post by thaumaturgy »

bedhead wrote: post #116
fideloper wrote: post #95

Earlier quoted context omitted.

Sounds like victim blaming. To an extent you're right, but the situation is not at all this black and white (like anything in reality). Take for example just the fact that it's easy to lose track of your current savings especially without ready access to the internet, a common situation for the low income.

Yes, it's is 100% victim blaming, because for god's sake, at what point do we expect grown adults to take some friggin responsibility for themselves?? Puh-lease, spare me the "easy to lose track" garbage. It's never been easier to keep track of one's finances, and that's before even considering an internet connection. If your budget is that tight, maybe, just maybe, actually closely tracking your bank account should…

You're obnoxious, but you're right. I've suffered more than my fair share of overdraft fees, and every one of them was my own fault. It didn't help that my bank's online banking system was a filthy liar with a long-standing bug that caused it to display an incorrect balance (for up to a day or more) when there was an incoming transaction that wasn't pre-auth or posted -- but ultimately that just meant that I had to start writing down all of my charges and deposits, so that's what I did.

Overdraft fees are onerous, banks absolutely do exploit their poorer customers for extra revenue, several of the larger banks are next in line for most-hated organizations in America behind AT&T and Comcast, and the structure of fees across a wide array of services are all biased against the poor. But, none of that changes the truth that most overdraft fees could be avoided if the poor were more diligent about their finances.

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

#179

Post by rlucas »

fredkbloggs wrote: post #157
themartorana wrote: post #125

Earlier quoted context omitted.

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 c…

I assure you that a $37B (almost all of which is margin) LOB is quite sufficient cause for any number of bankers to lose sleep over. RTFA.

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

#180

Post by Ollinson »

Touche wrote: post #15
stevewepay wrote: post #9

This is a quote from Michael Lewis' The Big Short, I'll never forget it: Obsessing over Household [Finance Corporation], he attended a lunch organized by a big Wall Street firm. The guest speaker was Herb Sandler, the CEO of a giant savings and loan called Golden West Financial Corporation. “Someone asked him if he believed in the free checking model,” recalls Eisman. “And he said, ‘Turn off your tape recorders.’ Eve…

> form of fines for overdrawing their checking accounts. Why in the world shouldn't you be fined for overdrawing your checking account? A checking account is not a loan, am I wrong in thinking this quote is B.S.?

Why not just deny the transaction if it can't be paid in full?

The bank isn't doing you any favors by letting you pay with money you don't have, they know they'll be getting that money back and then some.

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