Complaint Review: U.S. Banking System / Federal Reserve - Washington District of Columbia

was submitted at this website on October 27, 2011.

Just stay at this site and type in- MERRILL LYNCH, and go to Ripoff Report #481508 to see if it is available in the consumer comments section.

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***POLITICIAN ALERT: Don't forget to type in all of the following at this site and read the Ripoff Reports for important information-

POLITICIAN
OBAMA
BUSH
CHENEY
CLINTON
BARNEY FRANK
REAGAN
US GOVERNMENT

was submitted at this website on October 10, 2011.

Just type in 476868 at this site to see if it is available in the consumer comments section at Ripoff Report #476868.

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***MORTGAGE ALERT: Don't forget to type in 481508 at this site and read St. Clair's Ripoff Report for valuable information if you have a mortgage in the USA.

is a song that can be sung to the tune of- "Raindrops Keep Falling On My Head".

Just type in 646259 at this site and it appears in the consumer comments section at Ripoff Report #646259.

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***BANK CD ALERT: Don't forget to type in 453956 at this site and read Jim's Ripoff Report for valuable information if you have money invested in a CD at any of the big banks, like Wells Fargo.

is available at this website!

Just type in- WELLS FARGO, and it appears in the consumer comments section at Ripoff Report #646259.

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***MORTGAGE ALERT: Don't forget to type in the following and read the Ripoff Reports for valuable information if you have a mortgage in the USA-

MERRILL LYNCH
INDYMAC
BANK OF AMERICA
MORTGAGE

is available at this site!

*Just type in 529757 and it appears as 'Consumer Comment #22' at Ripoff Report #529757.

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I used the $5.50 check as a scenario for a bank that uses high to low debit posting. Yes, this is beneficial. However, it has been done over the past few years without prior disclosure of the costs involved, it is basically a "loan" from the bank, and is exempt from the Truth in Lending Act. With creative posting order used by the 24% of banks that post in any order that they choose this can become a large amount of money owed in fees in a short period of time. With a bank that posts debits before credits it can easily eat up an entire paycheck for a low income individual before the deposit is posted. Although I did not post the information in my research many banks noted on industry websites that they have linked this to their ATM/Debit transactions as well and will allow these transactions to be paid up to a limit. This is unscrupulous at best as most people believe that if they attempt to make a debit purchase or ATM withdrawal if the funds are unavailable the purchase will be denied. In the case of debit purchases this allows the consumer to simply cancel the purchase and not subject themselves to a temporary high interest loan from the bank. In the case of ATM withdrawals it is simply no better than "payday check cashing" to allow a withdrawal at this type of interest. Until banks began to offer this "service" to obtain overdraft protection it was required that you apply for an overdraft line of credit at competitive rates or link your checking account to another deposit account to have overdraft transfers. I think this was preferable, and it did not affect those with poor financial education or low incomes as they simply did not qualify, didn't have the protection and were required to be more diligent with their money. I think this option should be applied for and approved based on credit history and ability to pay. If offered it should be at a reasonable interest rate, not the "loan shark" rates the bank is now charging if the feature is used for a small payment.

I see your point about the $30 Courtesy Pay fee on the $5.50 check that overdraws the account, but wouldn't the other option be to return the check and charge you a $30 overdraft fee? In that event, you have to deal with the returned check as well as the overdraft. I guess my question is, are you proposing that the Courtesy Pay fee be on a sliding scale? That seems reasonable to me, although I am not sure how it could be easily implemented. Are you proposing that there be no Courtesy Pay at all? That would at least simplify the whole problem. Good post though.

Thank you for an intelligent post. I do not dispute that banks have expenses and need to make profits. My point is the majority of these profits come from profiteering in the form of these excessive NSF/Overdraft fees. In my previous post the scenario allowed for inflation of 1000% and yet the average fees now charged for these transactions was still 100% above those costs. The profits reported by banks to their stockholders are reported after deducting the annual operating expenses you mentioned. To cite an example Bank of America has reported for 1st Quarter 2006 a profit of 5 billion dollars (this is after expenses and after the acquisition of MBNA) and in the same report to investors noted net noninterest income for FY 2005 was 8.90 billion compared to 6.03 billion dollars the previous year. The banks themselves state that non interest income is over 40% from these fees. This is excessive in the least, and those who suffer the most from it are low to middle income individuals and families. To appease John and Scott, both of whom have apparently never had a fee assessed on their accounts, I will digress and state that at least half the blame for these individuals lies with their poor financial management. Once again, noting that most people do not dutifully enter electronic transactions and fees into their checkbook register, therefore often not knowing what funds are available to them. Perhaps if Banks would take more of a community interest in education of the young and donate some time to local schools to educate our youth on proper financial management and the perils of misuse of credit this situation would improve. As for the high to low debit posting order I agree with you that this is beneficial to the consumer. But please note that 24% of banks reserve the right to post debits in the order they choose. This makes them suspect at best as it allows them to manipulate the debit posting order to maximize their fee income. You stated most banks post credits prior to debits, I dispute this based upon the hundreds of posts here. The sheer number of posters on this website alone have evidenced that many banks manipulate their deposits vs debits to maximize the NSF/Overdraft fee income they receive. Were it only a few posters, your statement would have merit. As it is, instead, hundreds of posters with very similar scenarios nationwide it points to the obvious - that this is occurring. As it is said "If it walks like a duck, quacks like a duck and looks like a duck, then it must be a duck." Additionally for John and Scott - I haven't even begun to address the exemption that banks have from the Truth in lending act when giving courtesy Overdraft loans. This is an occurrence in which a bank will pay your transaction as a "courtesy". The bank then assesses a fee for this courtesy and is exempt under the Truth in Lending Act from notifying you of the cost of this transaction. Most banks charge a flat fee of $20 - $30 dollars for this courtesy. Therefore if you utilize a bank that has a debit posting order of high to low, you have made an error in your checkbook register, and your final debit of $5.50 would overdraw your account this transaction could cost you $30.00. The bank will lend you $5.50 at approximately 600% interest and does not have to disclose this to you in advance. Heather, I am aware that some merchants charge debit card fees or fees for use of an ATM they have present in their place of business. The fee you noted is common, and the amount of the fee did not suprise me. On a trip to Las Vegas at one point I wanted to utilize the ATM in the hotel. Noted before the transaction the fee for any transaction was $8.00 in addition to any fees charged by my bank; I of course took a trip to the bank instead. I was instead referring to fees charged for these transactions by MANY banks at the point of sale. A reference: "n a survey by the New York Public Interest Research Group, 89% of the banks surveyed tack on a point-of-sale fee of anywhere from 10 cents to $1.50 for PIN-based debit transactions. While the survey looked only at New York-area banks, people all around the country are finding these debit-card fees on their bank statements." In many instances the fee is not noted on your receipt from the merchant as it is separate from the actual sale so it is not required that the merchant notify you in any way. A fee of even $0.10, if charged multiple times in a weekend by a bank could result in an account going into overdrawn status and NSF/Overdraft fees accruing.

While it may seem that the bank is just out for themselves by posting larger dollar transactions first, they are not. Most larger dollar transactions that post to a customer's account are living expenses. (IE mortgage payment, car payment, utilities) These debits are posted first so that the customer does not lose the nessesaties of life. I thought the same way as most consumers, until I asked why it is processed that way. And no they weren't lying to me to get me off the phone. I work for the bank, and asked a co-worker. As for the debit card fee, it is the place of purchase charging the fee, not the bank. I almost got charged $10.00 by a hotel for using my debit card. Needless to say, after calling them and informing them they are in direct violation of federal regulations it was reversed. All fees of this sort must be disclosed at the time of purchase. As for credit/debit posting order. Most banks, post credits first then debits. They want to allow a chance for the customer not to overdraw. Not only does a negative account reflect bad on the customer, it also reflects bad on the bank. I will admit you have researched well the increase of the fees over there years. However, take into account inflation and what it does to everyone, and every business. You have to pay your employees more, pay more for taxes, pay more for health insurance. With the rapid growth of electronic usage, systems need updated. You have to advertise, or be wiped out by the competition. You have to renovate buildings, to bring them into current code. You have to provide new services to keep clients (this can be subdivided into several more areas). They have to pay for their utilities. Don't think that the banks are just taking these fees and pocketing them. Check 21 was issued to help the consumer as well as the bank. It made a photo copy of your check a legal document. It made it easier for the banks to prevent check kiting, and other fraudulent activities. Only with advancements like this can everyone's banking experience become safer.

While it may seem that the bank is just out for themselves by posting larger dollar transactions first, they are not. Most larger dollar transactions that post to a customer's account are living expenses. (IE mortgage payment, car payment, utilities) These debits are posted first so that the customer does not lose the nessesaties of life. I thought the same way as most consumers, until I asked why it is processed that way. And no they weren't lying to me to get me off the phone. I work for the bank, and asked a co-worker. As for the debit card fee, it is the place of purchase charging the fee, not the bank. I almost got charged $10.00 by a hotel for using my debit card. Needless to say, after calling them and informing them they are in direct violation of federal regulations it was reversed. All fees of this sort must be disclosed at the time of purchase. As for credit/debit posting order. Most banks, post credits first then debits. They want to allow a chance for the customer not to overdraw. Not only does a negative account reflect bad on the customer, it also reflects bad on the bank. I will admit you have researched well the increase of the fees over there years. However, take into account inflation and what it does to everyone, and every business. You have to pay your employees more, pay more for taxes, pay more for health insurance. With the rapid growth of electronic usage, systems need updated. You have to advertise, or be wiped out by the competition. You have to renovate buildings, to bring them into current code. You have to provide new services to keep clients (this can be subdivided into several more areas). They have to pay for their utilities. Don't think that the banks are just taking these fees and pocketing them. Check 21 was issued to help the consumer as well as the bank. It made a photo copy of your check a legal document. It made it easier for the banks to prevent check kiting, and other fraudulent activities. Only with advancements like this can everyone's banking experience become safer.

While it may seem that the bank is just out for themselves by posting larger dollar transactions first, they are not. Most larger dollar transactions that post to a customer's account are living expenses. (IE mortgage payment, car payment, utilities) These debits are posted first so that the customer does not lose the nessesaties of life. I thought the same way as most consumers, until I asked why it is processed that way. And no they weren't lying to me to get me off the phone. I work for the bank, and asked a co-worker. As for the debit card fee, it is the place of purchase charging the fee, not the bank. I almost got charged $10.00 by a hotel for using my debit card. Needless to say, after calling them and informing them they are in direct violation of federal regulations it was reversed. All fees of this sort must be disclosed at the time of purchase. As for credit/debit posting order. Most banks, post credits first then debits. They want to allow a chance for the customer not to overdraw. Not only does a negative account reflect bad on the customer, it also reflects bad on the bank. I will admit you have researched well the increase of the fees over there years. However, take into account inflation and what it does to everyone, and every business. You have to pay your employees more, pay more for taxes, pay more for health insurance. With the rapid growth of electronic usage, systems need updated. You have to advertise, or be wiped out by the competition. You have to renovate buildings, to bring them into current code. You have to provide new services to keep clients (this can be subdivided into several more areas). They have to pay for their utilities. Don't think that the banks are just taking these fees and pocketing them. Check 21 was issued to help the consumer as well as the bank. It made a photo copy of your check a legal document. It made it easier for the banks to prevent check kiting, and other fraudulent activities. Only with advancements like this can everyone's banking experience become safer.

While it may seem that the bank is just out for themselves by posting larger dollar transactions first, they are not. Most larger dollar transactions that post to a customer's account are living expenses. (IE mortgage payment, car payment, utilities) These debits are posted first so that the customer does not lose the nessesaties of life. I thought the same way as most consumers, until I asked why it is processed that way. And no they weren't lying to me to get me off the phone. I work for the bank, and asked a co-worker. As for the debit card fee, it is the place of purchase charging the fee, not the bank. I almost got charged $10.00 by a hotel for using my debit card. Needless to say, after calling them and informing them they are in direct violation of federal regulations it was reversed. All fees of this sort must be disclosed at the time of purchase. As for credit/debit posting order. Most banks, post credits first then debits. They want to allow a chance for the customer not to overdraw. Not only does a negative account reflect bad on the customer, it also reflects bad on the bank. I will admit you have researched well the increase of the fees over there years. However, take into account inflation and what it does to everyone, and every business. You have to pay your employees more, pay more for taxes, pay more for health insurance. With the rapid growth of electronic usage, systems need updated. You have to advertise, or be wiped out by the competition. You have to renovate buildings, to bring them into current code. You have to provide new services to keep clients (this can be subdivided into several more areas). They have to pay for their utilities. Don't think that the banks are just taking these fees and pocketing them. Check 21 was issued to help the consumer as well as the bank. It made a photo copy of your check a legal document. It made it easier for the banks to prevent check kiting, and other fraudulent activities. Only with advancements like this can everyone's banking experience become safer.

Stop writing bad checks or using your debit cards when there aren't enough funds to cover the transactions. That will really "stick it" to the banks. But that won't happen, because that would mean the people would have take responsibility for their own finances. As for the amount of the NSF fees, they should be a punitive amount to make people realize that the bank is doing them a favor by not returning the checks to the merchant. Then you would have the possibility of legal action being taken against you.

It seems your fingers not only did your typing, but did your thinking too. A long period of non-posting would be most welcome on your part. To quote Thomas Brackett Reed: "They never open their mouths without subtracting from the sum of human knowledge." First of all, my post is not of a personal nature, with the exception of my opinion that this is a travesty. I have no need to justify my personal finances with you. Despite your diatribe about wanting to use the banks money as a float, this is an issue of concern to millions of Americans. Several non profit organizations have done independent studies of this matter. If you read my previous post in its entirety you would see that banking industry sources themselves see this fee income as their primary income generating business tool. From one independent study I note: "These fees far exceed the cost to the bank for bouncing a check. In 1998, a CFA report noted that it only costs banks up to $1.50 to bounce a check. The report quoted industry data that estimates banks incur average transaction costs of $.50 to $1.50 to process bounced checks. Based on NSF fees charged in 1997, bounced check fees ranged from 11 to 32 times the cost of handling NSF checks." Okay, let's expand on the scenario. Let's fantasize that the banks have experienced a 1000% increase in their processing costs (not realistic as technology expands it becomes more cost effective) then the cost today would be $15.00. Based on a CFA survey in 2003 banks charged an average of $28.57 for overdrafts and $28.09 for NSF transactions. Therefore, if we allow them a 1000% increase from 1997 for inflation they are still making almost an average 100% profit on these transactions. The other side of the problem is the clearing order. Thirty-three percent of big banks disclose that they use high to low debit clearing which causes more fees to be levied when the largest check processed causes other transactions to bounce. Another 15% disclose that they generally clear high to low and 24% reserve the right to use any debit clearing order. Additionally these banks clearly indicate a policy in which the majority also post debits prior to credits if received on the same banking day. From another banking industry website: "NSF fees are the largest component of banks' revenue stream, accounting for 65 percent of banks' consumer check revenues. NSF fees offer a 90 percent gross profit margin." I have no problem with banks needing to make a profit for their investors. However, profits of this magnitude from NSF fees and the increasingly common "overdraft" courtesy loans is little more than profiteering. Banks were more than able to remain solvent in the past without this profiteering. It is entirely possible for a bank to make a reasonable profit without these excessive fees. The fact that they seem proud of these fees as their primary income generating source is abhorrent. The fees are commonly higher for banks that service low income to moderate income areas. While you insist that people only want to "use the banks money for free" your post has no merit. When a customer deposits a paycheck and writes subsequent checks to cover living expenses and purchases, and all the transactions post on the next banking day the bank has NO RIGHT to post the debits from the account prior to crediting the deposit.

The only reason you are complaining is that with the start of Check21 you no longer have use of the free use of the bank's money with a 3 to 5 day float. You are now forced to only transact a debit or write a check when you actually have the funds in your account. The bank was in effect giving you a free loan when you write a check today and it doesn't clear for 3 to 5 days and you made the deposit to cover it during the period. You are upset because you want to be able to use the banks money instead of taking the responsibility to maintain your balance and be aware as to whether or not you have funds. Deal with it. There is no ripoff here only you wanting to ripoff the bank by using their money for free.