I have a debit card. I think I may have used it on one or two occasions in an emergency, only because I forgot that I didn’t have any cash on me and the amount seemed too small to charge. Other than that, I never use my debit card. As a skeptical consumer, I always assumed that they were somehow designed as a way for the banks to generate income from their less vigilant customers.
Now the real story comes out -
Truthfully, I fully expect banks to view their customers as easy prey and design financial instruments with the goal of separating us from our money. That’s what banks do. They answer to their shareholders.
But, what bothers me is that credit unions are also incorporating these same schemes in order to generate income. Why would they resort to treating their members so poorly in order to generate income? I don’t understand it. I always assumed that credit unions were non-profit cooperatives created to serve in the best interests of their members. Can it be that there are some type of financial incentives for credit union insiders? Anyone?
Related Links: NYT: The Card Game
Comments 2
The Federal Reserve Board on Thursday announced final rules that prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.
Before opting in, the consumer must be provided a notice that explains the financial institution’s overdraft services, including the fees associated with the service, and the consumer’s choices. The final rules, along with a model opt-in notice, are issued under Regulation E, which implements the Electronic Fund Transfer Act.
According to Senate Banking Committee Chairman Chris Dodd -
“This is a long-overdue announcement for American consumers,”
“Giving customers the chance to choose whether they want ‘overdraft protection’ is important, but we need to do far more to protect customers from abusive bank products. We still need to stop the excessive fees, repeated charges, lax notification, and processing manipulation that have become standard in these so-called overdraft ‘protection’ programs.”
Here’s Senator Dodd’s proposed solution.
The Federal Reserve Board’s official final rules (pdf) are effective July 1, 2010. Let’s see how well they are enforced.
Posted 13 Nov 2009 at 2:18 am ¶The Card Game airs both on your local PBS station and online at the FRONTLINE website tonight at 9pm.
Posted 24 Nov 2009 at 9:07 am ¶Post a Comment