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!

Where are your blank checks?
Here's a quick quiz question for you: Where are your blank checks right now?

If you aren't quite sure, or if you know precisely where they are, but it's not a secure spot, listen up. Blank checks can provide a would-be thief with a "blank check" to steal from you, and a future check forger may be much closer than you think.

We've heard tragic stories of wayward sons, incorrigible daughters, light-fingered cleaning ladies, felonious-minded repairmen, and even theft-minded party guests stealing checks and forging them. Crooked bookkeepers corral the checks at the office and embezzle funds there. A packet of blank checks can put a criminally-minded individual one step closer to robbing your account. This crime of opportunity could happen to you if you don't take precautions.

Your unused checks should be stored in a locked closet, cabinet or safe. Only those with a "need to know" should be aware of their location. The lock should be locked at all times.

In terms of the checks in the packet you are currently using, don't leave them in the car when you take it in to be serviced. Don't leave your purse unattended while you're getting a massage or are otherwise occupied. In other words, use common sense to ensure that the only person alone with your checkbook is you.

A common technique is for someone with access to your blank checks (either in your purse, wallet, or still in the box) to merely steal a check or two from the middle of the pack. This allows the theft to go unnoticed for a longer period of time.

Next time you place a check order, consider asking your bank to allow you to pick up the new checks there at the bank, instead of having them mailed to your home or office, particularly if they would sit unattended in your mailbox for more than just a few minutes.

When it comes to safeguarding your bank account, you're the head of security. Make sure you're doing your job!

One more thing. If you're don't have a habit of routinely reviewing your bank statement when it is sent to you, develop that habit. Listen to our podcast to learn why.

The Importance of Reviewing Your Statements

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