Report: US Bancorp Dba US Bank
Category: Banks
US Bancorp Dba US Bank ripoff! Illegal overdraft charges violating FDIC Title VI Sec 604 (3) Minneapolis Minnesota
*Consumer Comment ..Question for US Bank charge us only if the check doesn't clear?
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US Bancorp Dba US Bank
Fax:
Minneapolis, Minnesota, 55402
U.S.A.
Submitted: 7/20/2004 10:07:47 AM
Modified: 4/13/2005 3:16:40 PM
Melody
Clive, IowaUS Bank has charged me a total of $457.00 in illegal overdraft fees in the last 5 months. At no time did my actual account balance go negative. Only my 'available' balance was negative, meaning US Bank was holding my deposit for verification.
This predatory overdraft fee collection is in blatant violation of FDIC law 'TITLE VI -Expedited Funds Availability, Sec. 604:(3) Overdraft fees - If the receiving depository institution determines that a check deposited in an account is a check described in paragraph (1), the receiving depository institution shall not assess any fee for any subsequent overdraft with respect to such account, if--
(A) the depositor was not provided with the written notice required under subsection (f) with respect to such determination) at the time the deposit was made;
(B) the overdraft would not have occurred but for the fact that the funds so deposited are not available; and
(C) the amount of the check is collected from the originating depository institution.'
After numerous written complaints and disputes, US Bank demanded documentation that the deposited checks were collected from their originating banks ON THE DAY THEY WERE DEPOSITED. I am required to obtain this documentation from the originating banks myself and send it to US Bank. My reply was that the FDIC law only requires that the deposited check is collected, there are no stipulations as to the date of collection. US Bank records show all my deposited checks were collected.
On 6/16/04, US Bank refunded $198 in overdraft fees to my account with no explanation why the remaining $259.00 is not being refunded.
My bank was formerly Firstar Bank until they were purchased by US Bank. I never had any problems like this with Firstar, only with US Bank.
Melody
Clive, Iowa
U.S.A.
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Updates & Rebuttals:
- Not quite correct - perhaps a misunderstanding... Eric [8/4/2004 7:17:27 PM]
- 259.00 seems pretty excessive Marie [8/6/2004 11:52:19 AM]
- Good points but... Eric [8/7/2004 9:24:37 AM]
- Been there.... My governmeent DIRECT DEPOSIT paychecks on friday were not clearing till tuesday. Jennifer [8/14/2004 6:29:37 PM]
- i have experienced similar problems regarding debit transactions. Jason [2/1/2005 9:56:24 AM]
- Question for US Bank charge us only if the check doesn't clear? Danny [4/13/2005 1:28:09 PM]
Not quite correct - perhaps a misunderstanding...
Melody,
I certainly understand your frustration but I must clarify what you have asserted in your complaint.
First, Firstar Bank acquired US Bank – not the other way around. Firstar merely chose to keep/assume the US Bank name.
As for your assertion regarding the Expedited Funds Availability Act you're not quite correct.
The section that you quote is “Safeguard Exceptions" – loosely described as placing a “hold" on your deposit. This is different than the “Schedule" for making your deposited item available. If a bank places a “hold" on your deposit (delays availability outside the “standard" schedule) and the item deposited is ultimately collected, it is under this section that you are entitled to a refund of your overdraft fees.
If you refer to SEC. 603. EXPEDITED FUNDS AVAILABILITY SCHEDULES, you'll see what I mean. In your case, the bank was processing your deposit under this section not Sec. 604. If not, you would have received a 'Notice of Hold' with your deposit.
259.00 seems pretty excessive
I am very sympathetic to the situation Melody described. I deposited my husband's paycheck before the end of the business day on Friday. The funds were not made available until Tuesday. We incurred 180.00 in overdraft fees. (90.00 were reversed by the bank manager who was comparatively gracious. The four other people we had to speak with to get to him were horrible.)
I looked at the federal law cited by Eric and it does appear that our bank complied with regulations — barely. There are a variety of unethical practices that are not illegal. I just did not expect my bank to engage in any of them.
I am wondering if US Bank incurred any additional expenses because of Melody's or my actions. If they did, do these expenses approach 259.00? Do they approach 90.00? Finally, I am wondering how much revenue Bankcorp makes a year as a result of bank penalties. Are there any trends? I understand that low interest rates and free checking have impacted bank's profits, however, it is not right to place the burden on people who are least able to pay it. I am planning to file a complaint with the FDIC and I suggest that Meldoy do the same. In fact, anyone who has experienced this should consider writing to:
Board of Governors of the Federal Reserve System
Division of Consumer and Community Affairs
20th and C Streets, N.W., Stop 801
Washington, DC 20551
They may not be able to get our money back but I am guessing that they collect data and I think this practice needs to be brought to their attention.
Good points but...
Marie,
You make some good points but let me clarify some things for you as well.
You wondered if US Bank incurred any additional expenses because of Melody's actions. The answer to that is yes and no. In short, when the bank pays checks out of funds that aren't collected it assumes a certain degree of risk. The risk is that if the bank pays the items and then the deposited item is subsequently returned, the risk to the bank is that they will be unable to collect from the customer and will suffer a financial loss.
Now, that seems silly to customers like you or Melody because obviously you would make good on your account – you are responsible and honest. Sadly, banks across the US collectively write off millions of dollars each week because of those who are less honest and less responsible than you are. Remember, when you deposit a check, you're depositing an IOU – a promise to pay. Until the bank that the check is drawn off of pays the check it's not really money “in the bank".
You also wondered how much money US Bank makes off of fees collected from customers. I see what you're getting at and you are absolutely correct. Banks make most of their money on interest income (basically the difference in what they pay on deposits and what they charge on loans) first and fee income second. Banks are not non-profit organizations and they, like any other business today must strike a balance with regard to products and pricing that allows them to make money for their investors (shareholders). If you don't think that necessarily affects you, consider that about 90% of all 401(k) plans in the US today hold US Bank stock.
That said, most banks in the US today offer several alternatives to protect their customers against overdrafts – particularly in instances identical or similar to your and to Melody's. The most common version of this is some sort of product called “Ready Reserve", “Quick Credit", “Overdraft Credit", etc. You may even have been offered it at some time during your time with US Bank. Often, people balk at the high interest rate (21.75% at most US Banks) and decline it. Oftentimes, overdraft protection costs you nothing unless you use it. Consider the following: In your case, let's assume that the checks that came in overdrew your account by $5,000. It probably wasn't that much, but we'll take a big number to emphasize my illustration. If you had overdraft protection, even at 21.75%, the interest on $5,000 would have cost about $2.98 per day. Your husband's check was available the next business day so at minimum it would have cost you $2.98.
But let's pretend that you didn't realize that the overdraft protection had kicked in until you received you next statement. At the most, that would be 45 days. This interest has now cost you ($2.98/day x 45 days) $134.10 – still almost $50 cheaper than the fees you incurred. I will concede that bank overdraft fees are egregious. That said, it is one fee a bank may charge that is 100% avoidable – you NEVER have to pay an overdraft charge if you are an informed consumer with some sort of overdraft protection.
Finally, with regard to writing the Board of Governors of the Federal Reserve System, as a consumer you can also contact the OCC (Office of the Comptroller of the Currency) and the FDIC to make a complaint against a financial institution. As a consumer you must do what you feel you need to. Please remember that among all of the banks in the US today, each one will choose to make its money or save expenses in some way, shape or form and they must go through the same balancing act as US Bank.
Maybe you could find a bank that gives you immediate credit for deposits or charges a small overdraft fee. Perhaps then they won't pay you as much for your deposit or lend you money at the lowest interest rate around or maybe you have to wait longer in a teller line because they have fewer staff. Who knows? You need to find the one that is right for you. If US Bank (or any bank for that matter) finds that a particular product, service or practice is causing them to loose customers then they will choose to change it.
Good luck!
Been there.... My governmeent DIRECT DEPOSIT paychecks on friday were not clearing till tuesday.
This has been going on FAR too long. They need to be stopped NOW!!!!!!!!!!!! Complaints are across the states. Go to AARP website to view how they have messed with seniors. WHEN WILL IT END????? In my case ----My governmeent DIRECT DEPOSIT paychecks on friday were not clearing till tues. SOMEONE PLEASE HELP...........
i have experienced similar problems regarding debit transactions.
i am very curious to hear the specifics of these cases. i have a few stories of my own. if you would like to discuss call me at 215-783-9483.
Question for US Bank charge us only if the check doesn't clear?
Why Couldn't US Bank, instead of charging us overdraft fees for a check that does clear, charge us only if the check doesn't clear? We have the money in our account.
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