Friday, August 20, 2010

One Cent Overdraft Fee

Coastal FCU announced earlier this week that starting Sunday, August 15 it would implement an overdraft forgiveness program that would allow members to reduce their overdraft fee to just a penny.

According to its website, members of Coastal FCCU could avoid a $28 overdraft fee, if the member either corrects the overdraft before 11:00 PM that same day or had a small overdraft that did not take their end-of-day account balance into the negative by more than $10.

However, any account that remains negative by more than $10 after 11:00 PM would be charged a fee of $28 per overdraft.

If I was an enterprising reporter, the first question I would ask Coastal is whether the credit union will notify members via e-mail or text message or other means that they have overdrawn their account and have until 11 PM to correct the deficiency.

According to Moebs Research Service, nearly seven out of eight people do not balance their checking accounts. This probably means members do not know their current balances and would be unaware of overdrawing their accounts.

So, in reality, which fee -- one cent or $28 -- is the member more likely to pay, if not notified of the overdraft?


  1. Coastal does offer email balanced alerts that members can sign up for within online banking.

  2. Joe:

    Thanks for the information. I hope Coastal members take advantage of this service.

  3. Only one cent ?! OMG

    That's also the exact same amount as the entire dividend for Bank of America (BAC) stock.

    Despite all the taxpayer assistance, in January 2009 the bank reduced it's dividend to a penny. That's where it remains today, including the forthcoming 9/24/10 payout.

    I hope banks like this will notify the public via emails or text messages or other means. Also about big banker salaries, tax advantages, nearly-free liquidity, subsidized capital injections, US backed asset swaps and guarantees to help their books, as well as forbearance on multiple multiple multiple-million dollar fines, plus government provided safety net protections on activities only tangentially related to banking. And only one cent ?!

    Good job Costal FCU

  4. what % of members are online banking members?
    of those, what % have signed up for email alerts?
    the people who bounce checks are probably not the same people who are online banking members.
    good idea. execution is key.

  5. I do not understand the rant above about banks. CUs are under an indirect taxpayer assisted bailout with the current $10B loan from treasury for wescorp and uscentral.
    whats the point on b of a? that they should pay a higher dividend off the taxpayer bailout?
    i love the attacks on b of a. not that im a fan or not---but the rant misses this point as well; b of a took on the toxic mess that is countrywide and merril lynch and absorbed alot of loss, otherwise the taxpayer bailout would have been worse.

  6. First of all, credit unions have not received a $10 billion loan from Treasury. The limit is $6 billion and only $1 has actually been borrowed. Most (if not all) will be paid back this quarter (hence the reason for the current assessment on shares) with interest. Can the banks and the FDIC make the same claim about its $30 loan threshold (in that same legislation)?

  7. your facts are wrong. ncua has a borrowing line of $30B. at the peak they'd borrowed 18.4B. currently still owe $10B. been in the press. check kpmg audited financials (that were released 18 months late).



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