Last week on Facebook I was celebrating the new law that stops banks from auto-enrolling new customers into overdraft programs, making it merely optional instead. A more conservative friend from college expressed his dislike of the law, asking me (I’m paraphrasing) “What happened to personal responsibility in this country? Why is it a good thing that the government is telling companies how to conduct their businesses?”
I understand where he’s coming from. Nobody likes to be told what to do, especially if it’s against their instincts, and through discussions with him, it occurred to me that this part of the law is actually pointing a huge, glowing neon finger toward personal responsibility, instead of away from it.
When I worked Customer Service for Bank of America, I heard requests every day from people who wanted to opt-out of overdraft protection. I think that’s a cry for more personal responsibility. In other words, they were asking Please, let me stop spending more than I can afford to! Unfortunately, the bank’s policy made no room for that kind of request. We had to tell them no.
For my entire adult life, if I made a mistake with my bank account (usually as a result of not knowing my correct available balance), the bank would still let me buy the little things I wanted, and charge me about $30 for each one that brought my balance further negative. That was entirely my fault, I know, but fixing that situation would’ve meant carrying around some kind of check register and/or holding onto receipts, which isn’t something I was willing to do.
Throughout all this, though, I never considered myself as irresponsible, at least not so far as it affected other people. Foolish, even idiotic, yes, but I was only hurting myself. The bank always got paid what they were owed, and they made a bunch of money from my mistakes.
I didn’t want that to continue, but I also didn’t want to be carrying little bits of paper everywhere. From what I could tell, there should’ve been a third option between paying overdraft fees several times a year and carrying some kind of man-purse. That third option is now here: you can turn off overdraft protection. Even better, it’s being turned off for everybody unless they turn it back on. All the law does is give consumers more options.
It looks like Chase Bank is already making changes to how they pay things. I got the following notice through my e-mail the other day:
I can’t remember the last time I saw the phrase “Paid Insufficient”. It basically means: we should’ve returned this request to debit your account, because it would bring you negative, but we know you’re good for it, so we paid it anyway and didn’t charge you a fee.
And they were right about me. The next day, the balance was positive again. A couple of scheduled deposits took longer than I thought they would, and now everything is back to normal. I don’t know for sure if this is a result of the new law, or if the bank is treating me better for being a good and loyal customer. Either way, I’m glad to see things changing for the better.
Then again, it’s also possible that the Fates are just playing a harmless joke on me, since that $1,495 payment in the notice above represents the last huge payment toward a credit card debt that has been ongoing for thirteen years.
Did you opt back into overdraft protection on your account, or are you willing to risk an item going unpaid right away?