California Supreme Court sides with Skank of America on overdraft fees

from LA Times:



Bank of America wins appeal on overdraft fees
The California Supreme Court overturns a 2004 class-action award to Social Security recipients from whose accounts the bank took fees for insufficient funds.

By Maura Dolan
June 2, 2009


The California Supreme Court unanimously overturned a billion-dollar class-action award against Bank of America Corp. on Monday, ruling that banks can collect overdraft fees from accounts in which government benefits intended for subsistence are directly deposited.

The ruling threw out a 2004 verdict by a San Francisco jury that found the bank violated state law by taking fees for insufficient funds from accounts set up to receive Social Security benefits.

The bank customers who had stood to benefit from the award included 1.1 million California residents receiving government assistance. James C. Sturdevant, who represented the Social Security recipients, said the award, with interest, would have cost Bank of America more than $2 billion.

He said banks earn about $40 million a year from overdraft charges and that some of the Social Security recipients in the suit lost 20% of their monthly income in a single day because of bank fees. ..........(more)

The complete piece is at: http://www.latimes.com/news/local/la-me-bank-america2-2009jun02,0,4121940.story

As I read the article there were two complaints:

That the bank was taking overdraft fees from the account which was over drawn.
That the bank was paying the largest check or autodebit first and thus the smaller ones were generating multiple over draft charges when paying them in reverse would generate a single charge.

I have to say that I have always thought that banks paid from large to small for the purpose of causing multiple fees, and was not aware tat there was a plausible explanation otherwise. The idea that the larger check is more important than the small one is plausible. In reality, it's less important to pay your mortgage on time than it is to pay your credit card bill on time, but it is more important to have your car insurance check clear than it is your electric bill.

Ultimately, I don't see the merit to this case because regardless of the source of income, it is the account holder's responsibility to not over draw his account. I realize that it's hard to make the due dates some times, but everyone knows that "timing" checks or racing them to the bank leads to over drafts eventually.

I need no explanations to know that banks will do whatever is in their favor. There is a reason banking used to be a heavily regulated business and why removing the regulations has led to the current financial mess. You need to read between the lines and past the article. Then your innate feeling that banks exist to screw their customers will return and you will see the error in the ruling.

Even if I were to agree that there should be a maximum overdraft fee or number of fees which could be charged on a single date, over draft fees have been around for a long time. Many people take them in stride, some even expect that a check will be paid and a fee assessed and they would rather pay the fee than have the check returned. Now personally, I figure it ought to be one or the other. If you get a fee then they should pay the check, and if they bounce the check then you shouldn't get a fee.

Yes, banks are in the business of making money. If they weren't, then they wouldn't exist. Regulation is a good thing- but regulation is no substitute for personal responsibility. Most banks will remove a fee if it's your first one or a rare occurrence. If you are habitual, they would generally prefer that you bank elsewhere and will say as much to your face. I know, because I have been told to take my business elsewhere.

Banks use the shame of a bounced check to rake their customers over the coals. What costs them pennies in shifting debits and credits on a ledger sheet costs their customers tens of dollars. Quite a nice mark-up for their service!

You'll notice that to avoid pissing off people who actually have money, they now all feature "automatic overdraft protection", which costs little to nothing to move money from savings to checking if it is needed. No, it is only when dealing with those too poor to have a savings account that they decide they have their customer over a barrel and they can ream them $25 a crack. Your gullibility in accepting the explanations of banks as to why they charge these fees is astounding. What will it take for you to wake up?

Another "personal responsibility" idiot
Posted by izquierdista

Banks use the shame of a bounced check to rake their customers over the coals. What costs them pennies in shifting debits and credits on a ledger sheet costs their customers tens of dollars. Quite a nice mark-up for their service!

You'll notice that to avoid pissing off people who actually have money, they now all feature "automatic overdraft protection", which costs little to nothing to move money from savings to checking if it is needed. No, it is only when dealing with those too poor to have a savings account that they decide they have their customer over a barrel and they can ream them $25 a crack. Your gullibility in accepting the explanations of banks as to why they charge these fees is astounding. What will it take for you to wake up?

Fuck off.

Basically the court is saying you sued the wrong people.

:kick:

In California, justices are up for approval in state wide elections.

Throw these bums out!