BOUNCING CHECKS? IT SHOULD COST YOU!

BOUNCING CHECKS? IT SHOULD COST YOU! If I have $50 cash in my pocket and want to buy something that costs $60; then I obviously don’t have the money to pay for it and cannot purchase the item. I could reach into the pocketbook of the woman standing next to me and take $10, but that would be stealing. I would be arrested for a crime; go to trial and even might go to jail. (Unless it were my first offense and I got probation!) By the same respect, if I write a check for $60 and only have $50 in my checking account, I am essentially stealing from the bank and should be punished in the form of an overdraft fee. And I also should pay an overdraft fee for every single check I bounce after that first one. Obviously our government does not agree with that theory. There is a bill (Consumer Overdraft Protection Fair Practices Act) pending in Congress now to limit the use of overdraft fees. Our legislative leaders have decided the fees are too high, so some banks have voluntarily cut back on overdraft fees in hopes of forestalling more government regulation of their business practices. Bank of America and JP Morgan Chase are the leaders of the pack. According to a story by Lita Epstein ( a financial author who has written more than 25 books, including The Complete Idiots Guide to Improving Your Credit Score) “both banks also agreed to cut down the number of time depositors could be charged a fee. JP Morgan will charge no more than three overdraft fees each day. Prior to this change, customers could be charged up to six fees in one day. That's more generous than Bank of America, which will limit the number of times customers can be charged overdraft fees to four times a day. Prior to this change, Bank of America used to charge fees as many as 10 times in one day.Under the old rules a Bank of America customer who was overdrawn by $5 or more could face a total of $350 (10 x $35 in one day). You may think it takes a totally incompetent to end up with 10 overdrafts it a day. But it's not as difficult as it appears. Suppose you make an error of $100 in adding in a paycheck just before your mortgage is due. The bank pays the mortgage first and then processes other checks. You wrote out nine other small checks or incurred debit charges, totaling $110. You could then be overdrawn by $10 and if all checks clear on the same day as the mortgage, you could be stuck with $350 in overdraft charges.” I realize everyone might not be as mathematically adroit as I am, but the use of a calculator makes balancing a checkbook easy enough for a four year old. Or one can use one of the many financial wizard programs (like Quickbooks) to keep track of one’s balance. People try to claim that with debit cards they don’t always remember to subtract from their balance when they use the card. That kind of stupidity is the person’s fault, not the bank’s fault. The bank should be able to “punish” the check bouncer for “stealing” money—because stealing is essential what writing a bad check is! If overdraft fees were HIGHER, people might be more careful when writing a check. By lowering the fees, banks make the punishment less painful. It is ironic that if I steal directly from your wallet, I could go to jail; but if I steal by writing a bad check, I might only have to pay $5.00. How paradoxical!