Congresswoman wants to crack down on banking overdraft fees - WALB.com, Albany News, Weather, Sports

Congresswoman wants to crack down on banking overdraft fees

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July 18, 2007

Albany--  Are you tired of all the fees you pay your bank? One consumer watchdog group says banks are making huge profits by increasing overdraft fees that hit people already struggling to make ends meet. Some lawmakers want to change that.

Before, no money in the bank meant checks and debit card purchases were either denied or they bounced. Today, they tend to stick. Some bank customers get stuck with unforeseen fees.

"I don't think that's right," said consumer Edgar McConnell.

McConnell has seen money and times change. "I've been as poor as anybody on the street or on the farm so I know a little bit about hard times," said McConnell.

He doesn't agree with the way some banks do business these days. "When you hit them with a bill like that it seems to me like that should be unconstitutional," said McConnell.

Here's what some view as the problem.  Say you have $50 dollars in your checking account. You unknowingly spend $40 on gas, another $40 at the mall and say $15 on some fast food. Some banks will allow those purchases to go through but you'll get a notice in the mail saying you've been charged up to $35 per purchase.

"If you don't have the funds they shouldn't charge more money on something that they don't have," said consumer Maurice Francis.

New York Congresswoman Carolyn Maloney wants to change that. In a statement to WALB Maloney said, "I actually support the general concept of overdraft loans and fees - banks have the right to make money for what can be a valuable and necessary service. However, I don't support withholding information from customers about their accounts and their money. Banks shouldn't make money off the backs of unsuspecting customers."

"Some of them probably have about $120, $150 taken out at one time and that actually puts them behind on bills getting paid," said Francis.

The Center for Responsible Lending reports the banking industry got more than 17-billion dollars in 2006 from those payouts.  That's up 24 percent from 2004. Maloney's bill would make sure consumers choose to sign up for overdraft protection, be told if they're about to overdraw their accounts at ATM's, get alerted during a sale if there's not enough money in their account and make banks give all customers copies of their overdraft policies.

"I agree they should," said McConnell.

Although many agree that something should be done to curb mounting fees, others feel it's up to the consumer to watch their money and spend it wisely.

"Mainly we should be mature adults to handle our accounts as they should be handled without having to overdraw on our accounts," said consumer Lisa Thomas. But McConnell feels it's about fairness.

"I don't think it's fair. I don't think it's right and I don't even think it's legal," said McConnell. Right now it is legal but it's a legality that could change.

Some people argue that banks are doing their customers a favor. Some folks don't mind paying fees to avoid the embarrassment of a bounced check or denied purchase.

A US House sub-committee held a hearing on this issue last week. Congresswoman Maloney's bill could make it to the full House soon.

feedback: news@walb.com?subject=OverdraftFeesLK

 

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