My credit union seems to me to have a rather immoral way of doing business. I have noticed recently excessive and unexplainable ways of charges-over-limit fees on my checking account. For example: I recently made a deposit of $100 to my account, funds were available. Went home and used my debit card to pay my PGE bill of $100. The system automatically does a hold of $1.00. PGE completed the request and withdrew the $100 from my account. Because their hold was still in place and didn't drop off when the transaction cleared, the credit union then billed me a $20 overdrawn account fee. This is not the first time this has happened. I feel this is unfair business practice and unfair to consumers. Is this a violation?
The credit union is required to disclose to you the types of transactions -- in a general way -- that may result in an overdraft fee. There is a fair amount of controversy concerning overdraft fees imposed when the overdraft is caused only by a debit card hold. This practice is currently being reviewed by federal regulators for inclusion in a list of unfair or deceptive acts or practices under the Federal Trade Commission Act. However, that determination has not yet been finalized, and it would not become effective in any event until October 2009. Until then, the practice is not regulated.
You have a good case for asking the credit union to refund its overdraft fee, but you should know that there is currently no federal rule that would compel them to make the refund. In the future, armed with the knowledge that your credit union has such a policy, avoid pulling your balance down so low as to risk incurring a similar fee.
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The credit union is required to disclose to you the types of transactions -- in a general way -- that may result in an overdraft fee. There is a fair amount of controversy concerning overdraft fees imposed when the overdraft is caused only by a debit card hold. This practice is currently being reviewed by federal regulators for inclusion in a list of unfair or deceptive acts or practices under the Federal Trade Commission Act. However, that determination has not yet been finalized, and it would not become effective in any event until October 2009. Until then, the practice is not regulated.