Banking Blog
You may see changes on your checking account statement!
You may have noticed some changes on your checking account statement. Recent changes in Truth in Savings regulations (Regulation DD for banks and Part 707 of credit union regulations) give banks and credit unions some new rules to follow that are designed to give you more information about the costs of certain banking services, so you can make more informed decisions.
New Descriptions
Many banks charge the same fee for an overdraft item -- one that's more that the balance in your account -- whether the bank pays the overdraft or returns ("bounces") it. For many years, some of those banks have used the same wording -- for example, "Overdraft Fee" -- to describe that charge.
The new rule now requires your bank to use two separate descriptions: one for the fee the bank charges if it pays your overdrawn item; the other for the fee it charges if it bounces the item. Banks get to select the wording, but you might see something like "Fee for Paid Overdraft Item" and "Fee for Returned Overdraft Item."
New Totals
Many banks offer a service called Overdraft Protection, Courtesy Overdraft Protection, or Bounce Protection. This is a service that adds an extra "cushion" amount to your checking account balance to "cover" you if you make a mistake and overdraw your account. You usually pay about the same you'd pay for an overdrawn check or electronic payment if you didn't have the service, but you are usually assured the bank will pay the item and allow your balance to go negative. You agree to pay the overdraft balance back, often within a specified period.
The new Truth in Savings rules require banks that offer this service to add some totals to your monthly checking account statement, to tell you how much you are charged if you use the overdraft service. There will be a total of overdraft charges and a total of bounced check charges for the statement period, and separate totals of those charges for the year-to-date. Because the rule was effective in the middle of 2006, that year's year-to-date totals may not include all the fees you paid during the year.
With all of the ways we can use our checking accounts today -- write checks, online bill payment, automatic charges for utilities, debit card purchases -- it's certainly understandable when an error happens. But the new statement totals of overdraft and bounced check charges can serve as a reminder of the costs of slipping up. And if you're thinking about depending on that courtesy overdraft cushion, those statement totals will show you just how costly that decision can be!
You may have noticed some changes on your checking account statement. Recent changes in Truth in Savings regulations (Regulation DD for banks and Part 707 of credit union regulations) give banks and credit unions some new rules to follow that are designed to give you more information about the costs of certain banking services, so you can make more informed decisions.
New Descriptions
Many banks charge the same fee for an overdraft item -- one that's more that the balance in your account -- whether the bank pays the overdraft or returns ("bounces") it. For many years, some of those banks have used the same wording -- for example, "Overdraft Fee" -- to describe that charge.
The new rule now requires your bank to use two separate descriptions: one for the fee the bank charges if it pays your overdrawn item; the other for the fee it charges if it bounces the item. Banks get to select the wording, but you might see something like "Fee for Paid Overdraft Item" and "Fee for Returned Overdraft Item."
New Totals
Many banks offer a service called Overdraft Protection, Courtesy Overdraft Protection, or Bounce Protection. This is a service that adds an extra "cushion" amount to your checking account balance to "cover" you if you make a mistake and overdraw your account. You usually pay about the same you'd pay for an overdrawn check or electronic payment if you didn't have the service, but you are usually assured the bank will pay the item and allow your balance to go negative. You agree to pay the overdraft balance back, often within a specified period.
The new Truth in Savings rules require banks that offer this service to add some totals to your monthly checking account statement, to tell you how much you are charged if you use the overdraft service. There will be a total of overdraft charges and a total of bounced check charges for the statement period, and separate totals of those charges for the year-to-date. Because the rule was effective in the middle of 2006, that year's year-to-date totals may not include all the fees you paid during the year.
With all of the ways we can use our checking accounts today -- write checks, online bill payment, automatic charges for utilities, debit card purchases -- it's certainly understandable when an error happens. But the new statement totals of overdraft and bounced check charges can serve as a reminder of the costs of slipping up. And if you're thinking about depending on that courtesy overdraft cushion, those statement totals will show you just how costly that decision can be!
posted by John at
8:40 AM
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