Nov 13, 2009 8:00 pm US/Pacific
Call Kurtis: Overdraft Overhaul
SACRAMENTO (CBS13) ―
Call Kurtis exposed this week banking behavior causing people to overdraft.
Tonight a major announcement from the Federal Reserve which could affect anyone with a debit card.
Law school student Abby Maurer of Sacramento was hit with 19-overdraft fees this year, charged $665 in penalties.
"It makes me so angry," she said.
Jeff Ledford of Lathrop was charged $175 in overdraft fees for overdrawing his account just $10.02.
"I think they extorted out of me," Ledford told Kurtis.
While we sat in his kitchen, we asked Ledford to call Bank of America and request his debit card be denied if he doesn't have the money in his account. They refused, saying it's their policy. He says he never asked for the protection in the beginning.
According to the FDIC, more than 75% of banks automatically sign up customers up for overdraft programs. Banks are undoubtedly profiting big off of overdraft fees. This year alone they are estimated to make 36 billion dollars.
"I think congress should do something about it, I think the federal government should do something about it," an outraged Maurer told Kurtis.
Now they are. The Federal Reserve today announcing new overdraft rules for banks. They'll now have to get your permission. Starting July 1, 2010 for new customers, and August 15, 2010, for existing customers, banks cannot charge you overdraft fees unless you opt in for overdraft coverage. In other words, you won't be able to withdraw or spend money you don't have, --you'll be denied.
It's exactly what customers like Jeff Ledford wanted.
"If I don't have the available amount, I don't want to spend the money".
The new rules do not apply to checks, just debit cards. They don't apply to automatic deductions. After a large number of complaints, some major banks including Bank of America announced in September, they will start allowing customers to opt in or out. Now it'll be required.
The new rules say nothing about the amount of overdraft fees banks can charge.
Congress is working on a bill that would limit charges to six a year.
(© MMX, CBS Broadcasting Inc. All Rights Reserved.)
Click to enlarge
Stumble It!
Reporting
Comments