What people are saying about the changes in overdraft fees

Bank feesAs you may know by now, several banks have finally gotten the message that America is more than a little weary of overdraft charges. And so Bank of America, Chase Bank, U.S. Bank and Wells Fargo have all made changes, or have announced that they plan to, when it comes to doling out fees to customers whose checking accounts have gone into negative territory.

So what are people saying? Here's a random round-up of thoughts and opinions from around the country...

Newsday: "That's good," they say of the changes, "but their pre-emptive strike shouldn't head off new regulation. Congress still needs to increase consumer protections... the changes don't go far enough to spare consumers the sting of the fees... and voluntary reforms are too easy to reverse."

Matt Wallis from the Oregon State Public Interest Research Group: "I think laws will protect consumers much better than press releases [from banks] will. Laws, of course, are a lot harder to rescind or go back on than corporate policy."

The Los Angeles Times
They had a recent headline, reading, "Banks' changes to overdraft fees aren't impressive." Columnist David Lazarus's gripe is that customers have to opt-out of a lot of these overdraft fee programs. The banks, he says, should opt everyone out, and then it should be up to the customer to decide if they want any additional charges to be rejected or to go into overdraft. "Studies show that most consumers won't bother opting out because it's seen as too much hassle, which is why nearly all businesses prefer opt-out to opt-in," writes Lazarus.

I, frankly, am ambivalent here. If a customer is too lazy or unorganized to opt out to possibly save them from being fleeced, that's their problem, not the bank's, but I think Lazarus is absolutely right when he goes onto say... "The plain fact is this: If a product or service is any good, it should sell itself. You shouldn't have to foist it on people and force them to reject it."

The Washington Post: Michelle Singletary discusses overdraft fees at length in her nationally syndicated column, "The Color of Money." She doesn't really discuss the new overdraft changes at banks, but she clearly thinks both the banks and customers have some 'splaining to do when it comes to all of these overdraft fees, opening her piece, asking, "Who's the greater villain: the guy at a bar who has one drink too many or the bartender who sold him that drink." She also notes that the rise of overdrafts can be attributed to the rise of debit cards and mentions an interesting statistic: "In less than 15 years, debit card transactions in the United States have grown from 1 percent of non cash transactions to more than 50 percent."

The Concord Monitor of Concord, New Hampshire, put out an op-ed on overdraft fees this week, saying, in part, that "such rapacious lending practices, which increased dramatically thanks to deregulation during the Bush administration, must be curtailed, and the industry can't be trusted to do it on its own." They concluded by saying, "The nation's national banks... have rightly lost the nation's trust. They should not be allowed to prevail because they drop a fortune on lobbyists."

New York Times: And Ron Lieber, a prominent personal finance journalist at The New York Times was interviewed recently on PBS, and he had this, among other things, to say: "On the consumer side, banks have always said that this is a service, it's a privilege, it's something that users value. And now we're going to see a test of that, because it's going to be clear, especially people who are signing up for new bank accounts for the first time, it will be clear to them that they have an opportunity to check a box and say, 'Yes, I want this,' or to decline the coverage. It will be very interesting in a year or two to see how many people have done that and the extent to which fee revenue has gone down."
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