Overdrafts at the bank

Hey you know I might give some impression it’s all peaches and cream and prosperity around here. Given normal circumstances I guess I have a top decile income, which by myself is enough to sustain a family of four and a home in a bucolic exurb. And as a conservative maybe I ought to have a bootstrapper’s perspective that dispenses no pity to less formidable personalities and their travails, which these people no doubt deserve by being unformidable and weak.

It ain’t quite that way. I was very broke in 2009-2010 due to sporadic employment in IT, and boy did I have some righteous anger at the banks. There was this one where I have a checking account. I won’t name it. But let’s say it rhymes with ‘Mells Largo’.

I had several episodes of overdrafts there, where I felt like they were just bending me over and giving it to me punitively again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again and again.

You know, yeah, you write bad checks, you get NSF fees. My beef was, they were employing an algorithmic process that maximized the amount of NSF fees that were chargeable on any day. IE, high to low ordering. If your balance was $50, and you had a $7, a $13, and $45 checks that were presented on the same day, they’d book the $45 check first so they could NSF you on the $7 and $13 for $32 each. 2 bounced checks rather than one, $64 rather than the $32 in fees.

I was enraged. I schooled myself on the topic, and was prepared to take on the system. Was it legal? Yes, I guess, but it’s grey there. Fair to say this was a fairly abusive practice, and right about that time there were some class actions I think in FL and CA that were successful in getting injunctions and settlements.

Not here. I contacted a firm in Minneapolis, and I was much better informed than this lawyer, even though she was ostensibly a subject matter expert. Nice gal, but she’d didn’t think it was a winner in this state’s regulatory climate. I contacted the AG’s office. Swanson’s people solicited a response from ‘Mells Fargo’, which they forwarded on to me in declining any action.

Very disappointing. I limited my business with ‘Mells’ but still had a couple sporadic episodes. Not where I was grossly overdrawn and had kinda abused my checkwriting, but where it seemed there was some gamesmanship with post dates on electronic ACHs. I didn’t bother to figure it out, I just pulled back from ‘Mells’ further. Since, I’ve been aware that CFPB and maybe Dodd – Frank put a stop to some NSF abuses.

But it seems some of that behavior lingered on into this year:

https://www.wellsfargo.com/assets/pdf/personal/checking/posting-order.pdf

So there it is. Its 2014, and somehow, somewhere, someone got them to stop doing that. I’d like to think there’s a DOJ announcement coming that explains it.

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