We have 2 checking accounts and a savings account with US Bank. Like many people, we have to live paycheck to paycheck. We try to put money aside, using our savings account. Occasionally, our checking account balance will fall to a negative balance. I'm positive we are not alone in having this happen.
After years of banking with US Bank and just assuming (yes, I know!) that daily withdrawals were taken out in the order received, I have learned that US Bank claims to have taken a "poll" concerning this. I do not recall ever having been asked to participate in any such "poll" so I have no way of knowing how long ago this happened. The poll asked which withdrawals you would rather have bounce, should the situation arise. The choices presented were either larger amount withdrawals, such as rent, mortgage, etc., or smaller amount ones, such as grocery or hairdresser. I was told the vast majority wanted the larger ones paid.
To put this into perspective, if you have $612 in your account, and pay your mortgage of $400, get the family of 2 adults and 1 child haircuts costing $55, pay a credit card of $160 and an electric bill of $125, this would put your account at a negative balance of $128. According to their policy of paying the higher dollar charges first, US Bank would pay the mortgage of $400 and the credit card of $160, thus incurring overdraft fees on the other 2 items of $37.50 each totaling $75.US Bank should take the economy of today into consideration, and pay as many as they can with the available funds instead of using this outdated policy.in the example used, had US Bank paid more withdrawals instead of the higher amounted ones, this would have incurred a charge of only half what it did.
We had a period of time when the overdraft protection had been used a few times, having funds brought up from savings to cover the amount not in our checking account. This overdraft protection, according to the bank, can only happen 5 times without penalty of fees from the bank. On the 6th time, the bank sets another fee and the "Feds" become involved, putting a "fee" of their own on it in addition to the fees the bank put on.
The "Feds" supposedly do this per a law dating back to the 1970's, stating that by repeatedly removing money from your savings account to put into your checking account is using your savings account as a checking account and at that time, the "Feds" can step in and instruct your bank to either close the savings account or change it to a checking account.
I feel this law is terribly outdated, and the fees should not be administered in today's economic situation. Why penalize us when it is obvious the money isn't there? I know the banks are in business to make money, but some have already been given the "bailout" funds and have squandered their use instead of wisely using it to help the economy.
I am sure there are others that are as "Fed" up with this situation, and I'd like to hear from you, as I'm sure others would. Do other banking institutions use these same practices? Should this arena be investigated further? Should these decades old laws be changed to fit todays economic situation? I believe so! Do you?
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