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Released: August 13, 2010

Big banks resisting changes to overdraft fee policies

Source: David Lazarus, L.A.Times (Free Registration)

Say this about big banks: They’re persistent. A federal judge this week ordered Wells Fargo & Co. to pay more than $200 million to customers for having processed debit card transactions in such a way that virtually guaranteed higher overdraft fees.

Julia Tunis Bernard, a bank spokeswoman, said the practice in question is “consistent with customers’ interests” and that Wells will appeal the judge’s decision. Representatives of Bank of America Corp., Citibank and Chase told me they have no plans to change their ways either.

The issue here is how banks handle transactions involving people’s checking accounts — in other words, payments with debit cards or checks, or ATM withdrawals. Consumer advocates have long maintained that the only fair method is to process such transactions chronologically. That is, each payment or withdrawal should be handled in the order received.

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