Consumer Law

TCF Bank To Curb Overdraft Fees

By Randall Ryder

Jumping ahead of proposed federal legislation, TCF Bank is attempting to curb its own overdraft fees, starting early next year.

Under the current system, customers can get hammered with multiple overdraft fees in the same day once their balance drops below zero. If a customer is unaware their balance is in the red, they could rack up an overdraft fee for every purchase that day.

Under TCF’s new proposal, the overdraft fee would be a once-per-day charge, ranging from $10 to $25 (TCF has not decided on the rate yet)

Although the proposal does not do away with overdraft fees in their entirety, it would still benefit customers. Other banks, such as U.S. Bancorp, still allow up to three overdraft charges per day (down from five).

The Federal Reserve is considering legislation relating to overdraft fees. The most recent proposal is aimed at restricting overdraft fees to once per month, with a maximum of six times per year. The Federal Reserve is also considering requiring banks to get customer approval before enrolling them in an overdraft protection program.

As noted in another recent post, banks make an absolute killing off overdraft fees. While customers certainly should be aware of their balances, getting hit with multiple overdraft fees in the same day is just not fair.

TCF to largely do away with overdraft fees | StarTribune

(photo: yomanimus)

Full post as published by Caveat Emptor on November 16, 2009 (boomark / email).