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Ally eliminating overdraft fees
Old 06-02-2021, 08:36 AM   #1
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Ally eliminating overdraft fees

Apparently Ms. Warren unloading on Jamie Dimon last week made an impression on Ally. Funny how they make it sound as if they've just come up with this incredible idea on their own.



Quote:
we're saying 'so long' to overdraft fees.

njhowie, doing right by you has always been our top priority, even when it means challenging the status quo. That’s why during the COVID-19 pandemic, we proactively waived overdraft fees to do our part in helping our customers.

After some learning and reflection, we’ve decided it’s time to do away with overdraft fees once and for all. It makes sense and it’s just the right thing to do.

Beginning immediately, overdraft fees will be eliminated. For now we’ll be reimbursing them, but in a few weeks, they’ll be removed entirely. It’s just one more step in the right direction of always putting our customers first. Because we’re not just here to do things the way they’ve always been done — we’re here to do it right.
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Old 06-02-2021, 08:40 AM   #2
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How about folks not go negative? That is a great way to avoid overdraft fees.
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Old 06-02-2021, 08:46 AM   #3
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Originally Posted by ExFlyBoy5 View Post
How about folks not go negative? That is a great way to avoid overdraft fees.
This. Of the many insidious fees that banks can collect, at least the overdraft fee is entirely avoidable with some minimal effort. That said, it's fine with me to get rid of them.
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Old 06-02-2021, 09:30 AM   #4
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How about folks not go negative? That is a great way to avoid overdraft fees.
Although this is a FIRE forum, at least acknowledge that there are many folks who are not as financially well off or that every now and then even those who are financially strong cut things close to the edge with their checking account and maybe an unexpected charge comes through.

I suspect there are more than a few folks around here who try to keep their checking accounts at a relatively low balance - maybe a bit more than anticipated expenses for the next month or two. Personally, I keep my balance at $2500 and as bills are paid, I bring it back up to $2500 transferring additional money in, and in advance if I know a larger payment is coming due. There were a couple times when I received alerts that my balance was going negative and to transfer money in immediately.

Why keep the checking balance "low"? 1. The money isn't working for me and earning any interest in the checking account. 2. If someone happened to gain access or fraudulently withdraw money from the account somehow, they're only going to get $2500 at most. Sure, if money is fraudulently taken from your account the bank protects you. However, it's not an immediate process where you say the money was stolen and they give you a credit for it 5 minutes later.
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Old 06-02-2021, 09:36 AM   #5
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I can remember once in the past few years that I almost had an overdraft by accident, and rushed to do a phone transfer to avoid it. Stuff happens!
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Old 06-02-2021, 09:55 AM   #6
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I like eliminating overdraft fees, but I wouldn't have minded if they had just lowered the cost to something reasonably close to what it costs the bank to process them. $5, $10, whatever. But the average $39 fee often causes a cascade of other problems. At least that's how I remember it from my youth, back when I was living hand to mouth. A fee shouldn't be a punishment, it should be a passing on of costs. So I say, good for Ally.
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Old 06-02-2021, 10:34 AM   #7
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I do all my banking at Ally these days. I am asking myself: "Is this actionable and if so, how?"

Psychologically lower my personal minimum balance? I'm still chewing on this....
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Old 06-02-2021, 11:11 AM   #8
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Perhaps a compromise between the 'no overdraft fees' and the 'keep the fees in place' sides, my Chase Sapphire checking account has the following terms:

Quote:
Fewer overdraft fees1

No fees on the first four overdrafts within the
current and prior 12 statement periods.
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Old 06-02-2021, 01:36 PM   #9
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Quote:
Originally Posted by njhowie View Post
Although this is a FIRE forum, at least acknowledge that there are many folks who are not as financially well off or that every now and then even those who are financially strong cut things close to the edge with their checking account and maybe an unexpected charge comes through.

I suspect there are more than a few folks around here who try to keep their checking accounts at a relatively low balance - maybe a bit more than anticipated expenses for the next month or two. Personally, I keep my balance at $2500 and as bills are paid, I bring it back up to $2500 transferring additional money in, and in advance if I know a larger payment is coming due. There were a couple times when I received alerts that my balance was going negative and to transfer money in immediately.

Why keep the checking balance "low"? 1. The money isn't working for me and earning any interest in the checking account. 2. If someone happened to gain access or fraudulently withdraw money from the account somehow, they're only going to get $2500 at most. Sure, if money is fraudulently taken from your account the bank protects you. However, it's not an immediate process where you say the money was stolen and they give you a credit for it 5 minutes later.
While not arguing with you per se, I don't see the fuss over O/D fees. I maintain a very low checking account balance and have had a O/D fee in the last couple of years. A bank's mission is to make money and O/D fees is a way to do that. When you sign up for the service, you agree to the terms. Folks have to learn personal responsibility some time.
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Old 06-02-2021, 02:14 PM   #10
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While not arguing with you per se, I don't see the fuss over O/D fees. I maintain a very low checking account balance and have had a O/D fee in the last couple of years. A bank's mission is to make money and O/D fees is a way to do that. When you sign up for the service, you agree to the terms. Folks have to learn personal responsibility some time.
The points you're presenting are not being argued. It's the situation, as explained by Ms. Warren in the video.

Ally got the message. JPM, as signified by Mr. Dimon's answers, did not.
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Old 06-02-2021, 02:33 PM   #11
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The points you're presenting are not being argued. It's the situation, as explained by Ms. Warren in the video.

Ally got the message. JPM, as signified by Mr. Dimon's answers, did not.
Got it. I admit I didn't watch the video. I have little tolerance for the back and forth yelling over each other that is so prevalent in the news. While this may not be the case, I'm not taking any chances.
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Old 06-02-2021, 02:59 PM   #12
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Always good to know, even though it won't affect me at Ally.
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Old 06-02-2021, 03:10 PM   #13
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Originally Posted by harley View Post
I like eliminating overdraft fees, but I wouldn't have minded if they had just lowered the cost to something reasonably close to what it costs the bank to process them. $5, $10, whatever. But the average $39 fee often causes a cascade of other problems. At least that's how I remember it from my youth, back when I was living hand to mouth. A fee shouldn't be a punishment, it should be a passing on of costs. So I say, good for Ally.


I agree 100%. In fact I think it’s better because it does not create a moral hazard. I wouldn’t mind paying a service fee if they paid the check. I think my bank charged $20 bucks or so for overdraft service to xfer funds from savings or credit card.
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Old 06-02-2021, 03:41 PM   #14
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Gotcha bank fees are a nice revenue source. I paid off a couple of rental mortgages at Chase last year. The requirement for free checking was to have a minimum balance or a mortgage. For years I met both criteria. I slipped under the minimum the next month and got hit with a $25 fee for the checking account. Pay a FEE for a checking account? I don't think so. I added enough to take the account well over the minimum and messaged them to apologize, pointed out the increase in the balance, and asked them to waive the fee. Which they did.
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Old 06-02-2021, 03:52 PM   #15
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I always turned off overdraft , as figured if I was spending more than I had, that was when I should stop.

Now, I'll turn on the Ally overdraft, and spend some of their money too
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Old 06-02-2021, 04:25 PM   #16
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Banks will get their money from other fees. I had to stop payment on a check last week that was lost in the mail. Cost me $20 to have the customer service rep push a button. They could literally put that option on the online banking app so I could do it myself. Why don’t they - because then they couldn’t charge me $20. If my bank removes overdraft fees I’ll bet stop payments go to $30.
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Old 06-02-2021, 04:31 PM   #17
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Banks will get their money from other fees. I had to stop payment on a check last week that was lost in the mail. Cost me $20 to have the customer service rep push a button. They could literally put that option on the online banking app so I could do it myself. Why don’t they - because then they couldn’t charge me $20. If my bank removes overdraft fees I’ll bet stop payments go to $30.
Or your interest rate drops 25%
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Old 06-02-2021, 07:31 PM   #18
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In all my life I never has an OD. Not that I had piles of money, I was just responsible. Another instance where people aren't held accountable for their actions. Maybe I overlooked it, but will Ally continue to pay checks on accounts or will they return checks as NSF?
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Old 06-02-2021, 09:23 PM   #19
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Got it. I admit I didn't watch the video. I have little tolerance for the back and forth yelling over each other that is so prevalent in the news. While this may not be the case, I'm not taking any chances.
You were wise. I got sucked into the first minute, and there was lots of that yelling over each other.

Where do politicians get off telling a business what business decisions they should be making (unless we are talking illegal and/or trade restriction acts)?

It's up to JPM/Chase to set their Over-draft policy, and consumers either accept it or go somewhere else. The bank isn't forcing people to write bad checks.

Where does this end? No more late fees on your mortgage, because you know, some "big bad capitalist" made money on those late fees? That guy should have countered about all the taxes that are charged people. In many cases, the sales taxes alone are more than the profit the company makes on that product.

Maybe Ms Warren should have directed that rant to her constituents, maybe offer up some education to them about how to balance a check book, or how to look for places that have cheap overdraft protection?

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Old 06-02-2021, 09:58 PM   #20
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I am not a fan of the big banks. And as a senior, I get free checking from one, though they are nibbling at the edges of it. Their loan rates are high and their savings rates are in the dumps. But, they are conveniently located and I don't keep much money in them. I rarely OD my account. Their fee schedule has put the fear of fees into me.

The YouTube clip showed me why I don't' want either of them controlling any aspect of my life. At best, I am collateral damage on their road to power and success.
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