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Home >> My Bank Said ...
Credit Union Levies Hundreds in Fees
I have been with a local credit union for eight years. My wife lost her job and we had to file bankruptcy. However, I reaffirmed on all my loans and have since paid them off. They keep telling me that with my excellent history with them, that we are very valued members. I recently had a rent check returned and I was only $150.00 short. I had a wire transfer en route for 5k and I have a direct deposit coming in the next day for 6k. They returned it anyway. I have never had a rent check bounce. I did not realize it bounced until I got a letter from my landlord that they not only charged me $50.00 NSF, they charged me for seventeen days of late fees, $170.00 and $75.00. My bank said not to worry, that they would run it through again. They didn't; and I got hit with over $300.00 in fees and a bad name. I want to switch banks and close my account, but what kind of a bank can I go to that really means we have a relationship with our customers and are not just a number? Where is there a bank somewhere that will help you and not dump on you when you make a mistake, even if your credit isn't the best on paper? I make at least $7000.00 every month in deposits, and it still doesn't matter. Now I wish I had included them in the bankruptcy.
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 Once you've made sure that your account at the credit union is back to a positive balance, visit a few other financial institutions. Check out another credit union and at least one bank, and get a complete picture of their checking account products, including what they provide for overdraft protection (courtesy overdraft programs, overdraft transfer coverage, etc.) Definitely find out what each institution's fee schedule is, including any continuing or sustained overdraft fees, and what types of transactions can cause the bank to assess those fees.
Of the types of overdraft protection available, choose either an overdraft line of credit or an overdraft transfer service from your own funds in another account, perhaps a savings account. The first of those charges interest on any advances from the line of credit to cover overdrafts. The latter may involve a transfer fee, although it's often free. Either of these alternatives are much better deals if they are available.
Also find out if a prospective new bank will allow debit card holders to overdraw their accounts with ATM or debit card transactions. A combination of an overdraft program that allows ATM and debit card access along with fast-mounting fees (such as those at your current credit union) form a dangerous combination that can turn a single account error into financial nightmares such as the one you've experienced.
Some other things to look for in a new bank are if the bank sends out notices as soon as a customer goes overdrawn. Many banks now send their customers text messages to alert them of pre-established events such as a low balance amount. When such services are available, its good to use them.
Published on BankingQuestions.com 7/08/10
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