I got no particular love for the banking industry, but every time I have had an overdraft (back in my earlier, more foolish days), it has always been my fault.  It caused me to become more responsible with my money and keep much better track of it. 

Don't blame the bank for your inability to balance a checkbook.  That's like blaming the cop for writing you the speeding ticket when you were speeding; you deserved it, now live with the consequences.

Dutch

NB nailed it, with the exception of Delaware banks.
I just paid off and a Dept store credit card, issued from a DE bank, and tore it up.
Every other month they'd add a $29 late fee, I'd send the check in 12
days before it was due and a day after I got the bill (in full). It
would take a half hour with someone from India on the phone to have it
removed.
Don't deal with DE and North Korean banks.

banks charge what banks charge. it isn't their fault when a customer overdraws his account.

what gets me, however, is the amount a store charges for a bounced check. when someone bounces a check in my store, the bank charges ME $7. i pass that cost onto the customer, collecting only cash.  most businesses, however, charge $25. that is a bit steep.

Well, for the most part I agree, however my mom just had a problem with Chase a few days ago. My mom bought something online with deferred payment until July 7, 2007.

She had it set up so that she had enough money to pay for another bill and then she got paid on July 6, 2007 and would be able to pay for the product. The stupid company that she bought the product online from took out the money on July 2, 2007 instead of the 7th. So when the other bill was withdrawn her account overdrafted and they charged her $35. She called Chase and told them what had happened and they wouldn't refund the money.

So she is going to a different bank. Before Bank One was taken over by Chase my mom had absolutely no problems with them and sometimes the overdraft was her fault and they would refund the overdraft charge. I've never overdrafted, but Huntington here in Central Ohio has the right idea about overdraft charges. Unlike pretty much every other bank out there, they don't charge the overdraft fee instantly. If you overdraft, they'll wait 7 full days or 5 business days to charge the overdraft fee in case you are getting paid that week. If my mother would have had that, she wouldn't have had any problem whatsoever.

Everybody knows that we have the God given right to bounce checks for free with no consequenses. Along with the God given right to get free healthcare and free foodstamps and free child support payments and free cheese and free education.

All from the Government.

It's free because the Government justs prints the money anyway.

Personally needing to use the overdraft float for a period of time in the past, I have two criticisms of how my bank handled overdrafts.

1.  The largest amount was withdrawn from the account first.  So, in my case, could have five items totalling $100 and one $100 item with $101 in the account.  At $30 per overdraft my cost on a $99 overdraft loan was $150.  Versus, smallest first, my cost would have been $30.  The bank's risk is the same either way.

2.  Per example above, the $30 charge per overdraft exceeded the amount of each overdraft.

The fees being charged greatly exceed the bank's risk exposure.

This was a local bank, they have been fair to me, I took out the account knowing the consequences, and I still bank there.

-- The problem is not that we are ignorant; rather, it is that so much of what we know is not true. --

There seem to be two stories on this out there - one related to overdraft fees, and one related to charging a fee for overdraft PROTECTION. I think CBS may be mixing the two up. Now, if you spend more than you have in your account, and the bank pays the check, I think they are well within their rights to charge you a fee.

However, some banks are "throwing in" overdraft protection with the "totally free" checking account, and then charging an annual fee for the overdraft protection. Criminal? No. Kinda dishonest? I think so.

It all still comes down to this, though... understand what you're signing, understand what you're agreeing to, and watch your money carefully. Personal finance is a participation sport!

Financial responsibility is the job of the consumer. However, there are a few revenue-maximizing tricks that the banks use
that are unfair. Here's a beauty from the credit card industry...

Bank offers you a $10,000 credit limit, and encourages you to do a balance transfer at a low interest rate. Nice little sales presentation, too... it shows a hypothetical higher interest rate, and what the $10,000 is costing you in interest; it then shows you the lower cost, smaller payments, etc. with your $10,000 on their card, at the lower interest rate.

You transfer $10,000. Bank accepts the balance transfer, posts interest, charges you an over-the-limit fee, and puts you into the penalty interest rate (often in excess of 21%) - before you've even received your first statement.

It happened to me. Should I have instinctively known to transfer less than the credit limit? Maybe. I sure won't make the same mistake again.

I'll also never do business with that bank, its affiliates, or its subsidiaries, ever again.

Here's another one:

You have a checking account with overdraft protection from your savings account. Well everytime the overdraft kicks in the bank charges you a fee to transfer the proper amount from savings to checking. Now this fee is not nearly as much as an overdraft fee, but the bank is basically charging you $7+ for an automated transaction that takes their computer less than a nano second to complete!

"There are two types of people in this country; those who provide freedom and those who enjoy it." MM says...