Learning Bankese

Along with English and a smattering of French, I’m adding bankese to my vocabulary. The following arrived in my mail box late last week. I’ve used Piggy Bank [PB] in place of the actual name of the bank: “We’re writing to let you know about a  new federal regulation that will impact the Standard Overdraft Practices that apply to your account … With current Standard Overdraft Practices PB, at our discretion, may authorize and pay transactions that cause overdrafts including ATM and everyday debit card transactions. Effective August 15th, any checking and recurring bill payment overdrafts will continue to be covered, but ATM and everyday debit card overdrafts will be declined unless you ask us to include them in Standard Overdraft Practices. …”

English translation courtesy of Visual Economics: “Effective July 1, the Federal Reserve is requiring that banks have an opt-in program in place for overdrafts. The policy requires bank customers to sign an overdraft agreement that gives the bank permission to charge an overdraft fee. If the customer does not opt-in to participate in an overdraft protection program, then any debit card purchases made from the checking or savings account would be declined if there is not enough money in the account to cover the purchase.”

PB made the change clear as mud to disguise the fact that it can no longer hide the fees that it charges. PB is engaging in a complicated procedure to recoup the money if there is an overdraft. It also had to reveal that it won’t necessarily pay an overdraft even if the account holder signs the authorization. The criteria it uses aren’t clear, but I bet the price of an overdraft that those criteria have to do with whatever is going to get them the most money.

The form that has to be returned to the bank is on the bottom of the sheet explaining the “opt-in” notice – the part that has the fees, which are $22 per item for one “overdraft day” and $37 per item for two or more “overdraft days.” This little printing SNAFU reminds me of the fact that the new trash hauler we have acquired through no choice of our own sent the list of holidays that produce a delayed pickup on the back of the receipt that one sends along with the check. Who designs these things?!

Here’s another take on the overdraft protection scenario. This bank really made it sound like it was doing a major favor to its depositors. I like the point that if the transaction is declined there’s a hint that the account might not have enough money. (Why else would a debit transaction be rejected unless the person using the card didn’t know the pin number?) I do have a problem with the example of someone savvy enough to maintain a checking account who doesn’t know the account lacks $2 for a cup of coffee.

So, dear PB, here’s my reply: Thanks, but no thanks for the overdraft protection. And next time, be honest about it.

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