Illinois Teen Learns About Bank Fees the Hard Way

[Admiral Yi]

Dunno why you dudes are bothering.  Yi does not care about exploitative practices so long as they meet the very minimal standard of involving obligations freely entered into.  E.g., it's okay to cheat people if they failed to read, or failed to understand, binding contract provisions.

Now, an absolutist stance on the freedom of contract is a nice, simple idea, but let's be clear: as an independent datum, this does nothing to bolster one's faith in contract absolutism if one has not yet joined the ranks of the converted.  Quasi-involuntary transfers from poor people to banking institutions that reduce the amount of consumer goods and services poor people can by, sometimes sharply, thus doing their part to reduce demand for jobs that provide such goods and services is not likely to inspire many plaudits outside of people who think any freely-negotiated contract, regardless of actual bargaining power imbalance, advances civilization.

I suppose one might argue that the bank takes the money and does equally useful things with it, but I think we all know by now that this relies just as much on blind faith as a belief in the fundamental goodness of a binding contract.

I have a conception of fraud which is independent of income.

[garbon]

But you told me everybody else was cool with these sorts of shitty fees and horrible service and all I had to do was check my account all the time.  That if I have to pay hundreds in overdraft fees it is entirely my fault for my own crappy inability to spend all my time checking contracts and balances.

Must have been a different Yi.  Do you have an evil twin?

I don't think a monthly fee on an account that drops below a minimum balance requirement is a shitty fee or horrible service.  I don't think a minimum balance requirement is shitty service.  I know exactly one person that doesn't bother balancing her check book (my mom) and she gets my dad to do it for her.  I confess I haven't surveyed a wide range of people to see if they bother balancing their check book, I just assumed everyone did.  Maybe in fact it is an incredibly onerous task that many or most people shirk, and these people are constantly paying overdraft fees.

I don't feel I can assess how reasonable any given overdraft fee is.  But it does make sense that if you're the kind of person who has no idea what their account balance is at any given time to look for a bank or credit union which does not charge a daily overdraft fee.  Or to purchase overdraft protection if that's an option.

I try to avoid checkbooks when possible. I haven't balanced a checkbook in years.

[Razgovory]

Does anyone write checks anymore?  I can check my bank account on the net, I don't need to actually do the balancing.  I remember learning how to write checks and balance checkbooks when I was in grade school.  Who knew it would turn into such a useless skill.

[garbon]

Does anyone write checks anymore?  I can check my bank account on the net, I don't need to actually do the balancing.  I remember learning how to write checks and balance checkbooks when I was in grade school.  Who knew it would turn into such a useless skill.

I do for my rent. That's about it.

[Iormlund]

Sure, and it costs the bank essentially NOTHING to maintain those accounts. 

It does indeed cost the bank essentially nothing in variable costs to service those accounts.  Or in fact any kind of deposit account.  But the bank has to find some way to cover its fixed costs too.

Isn't that what a maintenance fee is supposed to cover?

[derspiess]

Does anyone write checks anymore?  I can check my bank account on the net, I don't need to actually do the balancing.  I remember learning how to write checks and balance checkbooks when I was in grade school.  Who knew it would turn into such a useless skill.

My kids' school/day care only accepts checks.  Very annoying to have to remember to write one every Monday morning before I take them.  They don't accept credit/debit card & don't do any kind of automatically deducted (ACH) payment right from your checking account.

I got excited when I saw a card swipe machine with buttons at the front door a couple weeks ago, but found out it's only for the cards used by the state of Ohio for subsidized day care assistance or whatever.  Which surprised me that anyone uses that; no parents I see there ever look poor & almost all seem to drive nicer cars than I do.

[Iormlund]

Checks.

Sometimes I forget how weirdly backward you people are.

[DGuller]

Checks.

Sometimes I forget how weirdly backward you people are.

Good, another "cheque" snob. 

[Iormlund]

I don't really care how you choose to spell it, it's the method of payment that amuses me.

[Admiral Yi]

Sure, and it costs the bank essentially NOTHING to maintain those accounts. 

It does indeed cost the bank essentially nothing in variable costs to service those accounts.  Or in fact any kind of deposit account.  But the bank has to find some way to cover its fixed costs too.

Yup.

Isn't that what a maintenance fee is supposed to cover?

[Ideologue]

Dunno why you dudes are bothering.  Yi does not care about exploitative practices so long as they meet the very minimal standard of involving obligations freely entered into.  E.g., it's okay to cheat people if they failed to read, or failed to understand, binding contract provisions.

Now, an absolutist stance on the freedom of contract is a nice, simple idea, but let's be clear: as an independent datum, this does nothing to bolster one's faith in contract absolutism if one has not yet joined the ranks of the converted.  Quasi-involuntary transfers from poor people to banking institutions that reduce the amount of consumer goods and services poor people can by, sometimes sharply, thus doing their part to reduce demand for jobs that provide such goods and services is not likely to inspire many plaudits outside of people who think any freely-negotiated contract, regardless of actual bargaining power imbalance, advances civilization.

I suppose one might argue that the bank takes the money and does equally useful things with it, but I think we all know by now that this relies just as much on blind faith as a belief in the fundamental goodness of a binding contract.

Does the US have the common law notion that penalty clauses in contracts (as opposed to liquidated damages clauses) are not enforcable?

Yes, actually.

I'm going to assume, given their prevalence, that either they do not apply to bank overdraft fees, or fees leading to an overdraft (which is my bigger concern), either by statutory modification of the common law rule or because they have been held not to be penalty clauses.  Interesting take on it, though.

[Ideologue]

Dunno why you dudes are bothering.  Yi does not care about exploitative practices so long as they meet the very minimal standard of involving obligations freely entered into.  E.g., it's okay to cheat people if they failed to read, or failed to understand, binding contract provisions.

Now, an absolutist stance on the freedom of contract is a nice, simple idea, but let's be clear: as an independent datum, this does nothing to bolster one's faith in contract absolutism if one has not yet joined the ranks of the converted.  Quasi-involuntary transfers from poor people to banking institutions that reduce the amount of consumer goods and services poor people can by, sometimes sharply, thus doing their part to reduce demand for jobs that provide such goods and services is not likely to inspire many plaudits outside of people who think any freely-negotiated contract, regardless of actual bargaining power imbalance, advances civilization.

I suppose one might argue that the bank takes the money and does equally useful things with it, but I think we all know by now that this relies just as much on blind faith as a belief in the fundamental goodness of a binding contract.

I have a conception of fraud which is independent of income.

I don't see where fraud comes into it.  I'm not accusing banks of fraudulent practices, or anything unlawful.   (At least, not today. )

I'm accusing them of predatory and exploitative practices.  Morally wrong and socially and economically damaging.  But not illegal--that's actually my whole point, that such practices should be illegal, but are not.

[Admiral Yi]

You accused them of cheating.

[Ideologue]

In a manner of speaking.  I didn't accuse them of being dishonest.  I accused them of playing an unequal game.  At the least, leveraging the expectations of low-balance accountholders that they can maintain either a minimum balance, or at least will not become so in arrears that fees can overdraft them.  Or by renegotiating the terms of an account after the account has been open and used for years and it requires an onerous number of actions for the accountholder to disentangle themselves from that bank.

[derspiess]

Or by renegotiating the terms of an account after the account has been open and used for years and it requires an onerous number of actions for the accountholder to disentangle themselves from that bank.

Banks are required to send change in terms notices to account-holders at least 21 days in advance of the change, which should give the account-holder adequate time to opt-out & close the account.

But I guess in today's fast-paced world, nobody should be expected to read anything.