Debit card changes effect overdraft procedures - KAIT Jonesboro, AR - Region 8 News, weather, sports

Debit card changes effect overdraft procedures

By Brandi Hodges - bio | email

JONESBORO, AR (KAIT) - No matter how much you're spending, every swipe of your debit card deducts funds from your account.  When you reach the bottom of your balance many banks offer overdraft protection at a fee. 

A rule from the Federal Reserve requires banks to get their customers permission before charging them to pay some debit or ATM overdrafts.  Now one bank will stop offering overdraft protection for their debit card customers.

"I don't blame them I've been over drafted several times and it's not fun when you have to pay the overdraft charges," said Pat Johnson.

Bank of America has an overdraft policy now but starting this summer that policy will disappear.

"I feel that is unfair because there are a lot of us that need that overdraft in the world today," said Robert Penny.

"It probably will help some people and hurt some people who are used to over drafting but then in the end I think it will help them too," said Marion Morgan.

According to economic research firm Moebs Services banks earned $38.5 billion dollars in 2009 in overdraft and insufficient funds fees.

"Especially with the economy like it is everyone is low on money and the banks are the ones who are profiting from it," said Alice Long.

"I believe there's a lot of abuse going on.  Banks are getting away with many things and the community is being affected," said Kelly Leader.

With their new policy Bank of America will no longer allow their customers to use their debit card once they go reach their bank balance.

"It goes both ways.  The bank needs to provide a certain level of assistance but we are the ones who actually make the purchases so we need to have the entitlement and the responsibility to know where our money is going," said Leader.

The new policy goes into effect in June for new customers and in August for existing customers.

Jonesboro president for BancorpSouth Joe Williams told Region 8 News their bank does allow debit card transactions to go through even if the customer doesn't have the money.

Williams said the big question is whether the customer would rather be able to use the card

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