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Fifth Third Bank Changes Debit Procedure

This article was written by in Banking. 5 comments.


Some good news has come out of the class action lawsuits dealing with overdraft fees. The lawsuit against Fifth Third Bank still has one more hurdle to overcome, but most likely, customers who have paid overdraft fees for debit card transactions may see some or all of these fees refunded.

Also as a result of the law suit, Fifth Third Bank will be changing the way it processes customers’ debits and credits. Currently, debits or withdrawals are posted to the account from largest to smallest, like many other banks. The banks that do this often say that the reason is to allow the large, more important debits like mortgage payments and rent checks to process first, assuming smaller amounts are less important and could therefore bounce or draw an overdraft fee. The more likely scenario is that this large payment will cause the first overdraft and associated fee, and then every subsequent, smaller debit will cause additional fees.

Reader Tom S. wrote in to say that after inquiring, Fifth Third notified him that this process will change as of March 25, 2011.

First: All deposits (including funds available from pending deposits) made prior to the end-of-day cutoff.

Next: All pending and posted date/time stamped debits will be deducted from the customer’s balance. Date/time stamp debits include all:

  • Debit card transactions (both PIN and POS)
  • ATM withdrawals
  • Transfer from the account initiated via Internet banking or an ACE transfer

Finally: All other batch debits will process next in highest to lowest dollar order. These are transactions the customer initiated that are processed once per business day such as:

  • Checks
  • ACH debits
  • Bill Payments
  • Account Fees

This is great news. This is a process that makes sense.

Keep in mind that this doesn’t mean you can deposit a check on Monday and expect the full amount to be available first thing on Tuesday. Local checks are often processed faster than non-local checks. There are a few differing definitions of local checks, but for the most part, it means that the bank branch that issued is located in the same processing region as the bank of first deposit. Either way, there may be a delay of a day, five days, or more than ten days until the bank makes those funds available for you.

Published or updated February 28, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 5 comments… read them below or add one }

avatar valleycat1

Why don’t financial institutions process the items in the order they are received – or, with online banking & other transactions, by the date/time stamp on the transaction? Why should the amount of the transaction be a factor here?

Most people make a paycheck deposit, then write or release payments, and pay in the order they’re most important to themselves. Many people are fully aware of and take into account the lag time between writing a check or posting an electronic payment request & the time it posts.

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avatar skylog ♦368 (Nickel)

agreed. if the firms have “made the move” to a more equitable and sensible sytem, and are moving away from trying to get all the fees they can in this regard, why not do as you suggest?

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avatar shellye ♦107 (Cent)

Would be great if Bank of America decided to follow this same procedure.

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avatar Anthony Waddell

I overdrew 43 bucks and when my direct deposit for payroll hit my bank account today I was charged over 500 dollars in fees leaving me with 36 dollars and 46 cents in my account. So 43 dollars cost me over 500….This is beyond ridiculous. I can’t even believe this. Its shocking.

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avatar judith Notatthistime

with interests rates so low the banks dont make money there so they sneak in these fees and do such things like debt an account before crediting so they can get overdraft fees, thats their bread and butter once again major corps are profiting from the middle and lower class. follow the money its not going into the working class pocket

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