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Home >> Accounts >> Checking Accounts
Bank Allows Check: I Get Fees - Why?
If funds are not in your account yet, why do banks allow a check to go through your account anyway, and then charge overdraft fees?
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 That can happen for one of two reasons. First, it may be that the bank has to provide you access to your funds by paying checks you write before it learns of the return that another check, which you deposited to your account, was returned unpaid, thus creating an overdraft. Your bank could do what banks have been doing for decades, advancing credit to you in the form of access to uncollected funds, on the assumption that a check you deposited will be paid.
In either event, if a deposited check is returned unpaid and creates an overdraft, the bank is entitled to impose an overdraft fee, assuming that it has disclosed the fee correctly in advance. The point here is, that a bank almost never really knows when checks it accepts for deposit are paid. The check collection system operates on an exception basis, and banks have to make certain educated assumptions about the fate of those checks.
Published on BankingQuestions.com 10/13/09
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