|At least my credit union isn't THIS disingenuous.|
Update: 8/2/2010 - 9:31 PM: On second thought, maybe my credit union is the problem.
Update 8/3/2010 - 2:30 PM After all the confusion, fostered by the federal government, I am just fine.
In March 2010, Bank of America decided that it was going to be nicer to its customers.
Bank of America said [recently] that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same.
They no longer have that choice. Someone put pressure on Congress. Now, as of August 15th, BOA will be required by federal law to screw their customers. My credit union will have the same obligation.
I called my credit union this afternoon after I got a notice in the mail saying that they were going to start charging me twenty collars for every debit card overdraft transaction, instead of the interest that they normally charge. According to new federal legislation, this requirement goes into effect on August 15th, 2010.
I often go into overdraft at the end of the month. With several transactions. But the most interest I've ever had to pay during any overdraft period is less than $5, and it's usually much less than that. I asked my credit union representative if I could opt to keep that sort of overdraft coverage. I was told that I could not. I would not be so fighting mad if I thought that the federal government really did this because they thought they were helping me.
Update: 8/2/2010 - 9:31 PM
The more I look into this, I'm wondering if my credit union is just taking advantage of--shall we say--an "opportunity". It's looking perhaps like they are NOT required to charge a flat fee for opt-in overdrafters. This article links to some banks that allow you to (a) allow another account to be tapped to cover the overdraft, and/or (b) to charge a small (around 7-8%) annual interest rate. I guess I'll have to visit my credit union in the morning. This ought to be interesting.
Update 8/3/2010 - 2:30 PM I visited my credit union. They said that dozens of people have been in today with very similar concerns that I have had, but that (at least in my case) there is nothing to worry about. My credit union has what is called an "overdraft line of credit", which my account is entitled to, that still covers overdrafts up to several hundred dollars. Not everyone has such a line of credit, some because they don't want it, and others because they don't qualify.
It's not until my overdraft line of credit is maxed out does the "overdraft service" kick in. I've never come close to having that happen. I asked my credit union rep why something about the line of credit couldn't have been put on the scary-looking notices that were sent out. He said that he thought it was because of the verbiage that the federal regulation required, but that at any rate the National Credit Union Association mailed out ALL of the notices, simply pasting the appropriate letterhead on the top of the page and credit union director signature in the appropriate place on the page. That left my credit union with very little leeway in how it could notify people like me about our lines of credit.