| T.R | Title | User | Personal
Name | Date | Lines |
|---|
| 101.1 | The "deafult" condition | VIDEO::GRAHAM | Dr. John | Fri May 20 1988 18:24 | 7 |
| I have an equity loan through DCU also. I know that when I first
got it as part of the agreement, that any overdrafts would go against
the equity loan instead of savings. Evidently this is the "default"
condition and that you have to specificaly ask to have overdrafts
go against your savings.
John G.
|
| 101.2 | Incorrect default if you ask me. | SALEM::ALIZIO | | Fri May 20 1988 19:49 | 10 |
|
Default condition, huh? And I just can't imagine (sarcasm intended)
why DCU would have it default to a 9.95% loan instead of against
savings like it normally is! That would be ludicrous. The NORMAL
default is against savings. Not everybody has a home equity loan
for crying out loud! Isn't there a law about truth in lending? If
you get this little surprise by default, it just doesn't seem
kosher to me. Perhaps someone else can confirm that this is the
"default" condition. Great, just great.
|
| 101.3 | Don't panic | DR::BLINN | Bill & Opus in '88 (Penguin Lust!) | Fri May 20 1988 20:02 | 30 |
| Calm down. Stop flaming. Make sure your brain is engaged.
Go back and CAREFULLY read the papers you signed when you took
out the home equity loan, both the application and the final
agreement. If there's really nothing in either of them that
says that DCU will post overdrafts against your home equity
loan (instead of savings, which is what they do if you don't
have a home equity loan or other line of credit), then you've
got a legitimate beef. (By the way, make sure this isn't in
some OTHER official statement of DCU policy that you've been
given.)
If you can't find it written down, then your hypothesis that
the person doing the check clearing made a clerical error is
a possibility (although, for the most part, such errors are
nearly impossible -- the check clearing is usually done by
a clearinghouse that's almost completely automated, and the
posting against your DCU accounts is probably done completely
by a computer program that simply implements whatever rules
are programmed into it).
In any case, if it's not written down anywhere in the papers
you signed in applying for and accepting the line of credit,
then you should write to the DCU and ask for a refund of the
interest amount that you were billed on the equity loan.
If you really don't need the equity loan, you might consider
having it cancelled.
Tom
|
| 101.4 | | BINKLY::WINSTON | Jeff Winston (Hudson, MA) | Fri May 20 1988 21:13 | 7 |
| Actually, they think they're doing you a favor, as , if you have a CRT
line of credit, it is automatically cancelled and replaced by the home
equity line. Of course, they don't publicize this, and some people
aren't thrilled with drawing down on their house so easily. This is
discussed elsewhere in more detail (dir/title=equity) (and partially
falls under the category of DCU communication, which is also discussed
elsewhere in this file (dir/title = * ) )
|
| 101.5 | It's dishonesty, pure and simple. | SALEM::ALIZIO | | Mon May 23 1988 16:49 | 37 |
|
re. .3
Whether or not there's something in the small print to the effect
that overdrafts go against my home equity loan, is not the point.
And my brain is quite well engaged, thank you. My issue is that
since the "normal" condition is for people to have a savings account
and not a home equity line of credit, then the "normal" default
should be against savings. To alter the status quo in such a manner
is sneaky, in my opinion. The issue is honesty, or "truth in lending"
if you want to take the legal approach. The only reason we need
"truth in lending" laws are because people have been known to do
some sleazy things when it comes to lending money. Just as a realtor
is required by their code of ethics to tell you that the empty lot
next to your new home is slated to become a landfill, but needn't
list it in the sales agreement, so is DCU required by ethics to
let you know when the status quo is changing. Its called honesty.
As far as reading all the loan agreements, I have already read them
once. Most people probably don't take the time to read all the fine
print, but I do. It's probably not all that effective since you
need to be a lawyer to understand all that legal mumbo jumbo, but
I do my best. In all the reams of paper that I signed, I truly don't
remember anything about changing the overdraft default. When I get
a chance, I'll re-read them though, just to satisfy my curiousity.
The bottom line for me is still that DCU failed to point this situation
out, and whether it's buried in some micro-fine print isn't the
issue at all. The other person that replied to this note, who had
the same situation, didn't recall signing anything to this effect
either. Obviously DCU chooses to keep this very low key. And it
doesn't have anything to do with the fact that they make a few extra
bucks off it, right. Riiight.
I'm still flaming, and will continue to flame at people who display
less than honest behavior. I guess I'll disengage my brain now and
get back to work. 8^)
|
| 101.6 | Calm Down - Please | 21006::FULTZ | ED FULTZ | Mon May 23 1988 17:48 | 12 |
| You know, this whole issue is moot if you simply were careful not
to bounce a check. With no overdraft, it makes no difference where
the default is - home equity or savings. If you have enough in
savings to cover everything, then why not move it to checking, where
it should be able to get a slightly higher interest rate than in
savings?
It does no good getting angry at the DCU. I am sure they are not
sitting back trying to find ways to cheat people.
Ed..
|
| 101.7 | Very calm, thanks. | SALEM::ALIZIO | | Mon May 23 1988 19:16 | 24 |
|
re. .6
Agreed, that no overdraft = no problem. But, due to a unique set
of circumstances, it does occur. Unfortunately, if it were that
predictable, we'd all make sure that we transferred enough out
of savings to avoid it. I am not blaming DCU for this. It was
my mistake. As I said previously, there is a silver lining in this
cloud in that I discovered the change in the overdraft default.
And I'm not really all that un-calm. I think it's a valid issue
to raise. I'm not paranoid about DCU intentionally ripping me off.
This is a policy which bears re-examination. If enough people complain
about it, then the policy might be changed. If we all take a laissez
faire attitude, then nothing happens. I solved MY problem by sending
a letter to the DCU office at Parker Street. I posted this note
as an FYI to others who have or are considering taking out home
equity loans. If I spare even one person the grief (and expense)
of this happening to them, then it will have served it's purpose.
I'm really not as upset as my notes may seem, so please refrain
from telling me to calm down. I think I have a legitimate gripe
and have taken a rational approach to helping others avoid the
same situation. Have a nice day!
|
| 101.8 | So what is the issue? | BEIRUT::SUNNAA | | Mon May 23 1988 19:20 | 14 |
|
re 101.6: I don't think the issue here is how this person manages his
checkbook (and it shouldn't be). The issue is how does DCU handles
overdrafts and where the default it. It does make a difference to
some people where the check is paid from, given that the reason
they took out the Personal Credit line is to cover the checks or
take out instant loan without having to get loan approval.
So, Again the question posed is : How does DCU handle the overdraft,
and do they or should they notify people as to what their policies
are?
NJS
|
| 101.9 | Thanks for the clarification | DR::BLINN | Bill & Opus in '88 (Penguin Lust!) | Mon May 23 1988 19:56 | 30 |
| Thank you for your clarification in .7 regarding your intent
in posting your note. I'm glad to learn that you were more
concerned with helping fix the problem than just complaining
about it.
Nisreen, you've raised very valid concerns in .8. I hope we
will see a response from DCU on this.
I suspect very strongly that the overdraft processing is almost
completely automated. I would not be surprised if the details of
how it gets handled (from which accounts, in what order, does it
look for money to cover the check) are not very well documented
(outside of the program that implements it, if it is even
documented there).
DCU should make it very clear to members how overdrafts will be
handled. In any situation where opening a new account (such as a
home equity loan) will change the situation, there should be a
CLEAR disclosure of how things will change. That seems not to be
the case.
Ideally, DCU should allow members to specify the way overdrafts
should be handled, when there may be more than one potential
source of funds. Also, a member should be able to specify that
certain accounts should be "off-limits". For example, you should
be able to say that you want the check to bounce (and that you're
willing to pay any charges) before you want it to wind up
borrowing against your home.
Tom
|
| 101.10 | Assumptions are a dangerous thing! | CSCMA::KNORR | Singing those field test blues ... | Mon May 23 1988 20:28 | 29 |
| I just read the CRT 5000 cover letter and "fine print". Relevant
points follow.
From the Cover Letter:
> In addition to being a source of instant credit, the CRT is overdraft
> protection for your checking account. If you bring your checking
> account negative, the CRT will replenish the account to a zero
> balance.
Based on this, I would be (and was when I signed it) of the opinion
that if I bounce a check, the money is coming out of the CRT 5000
line of credit, not my savings account.
There's also some stuff about overdraft coverage in the fine print
which pretty much says the same thing. My feeling is this document
should be modified to include an explanation of the options available
to the customer - i.e. it doesn't *have* to work this way if you
don't want it to.
- Chris
other words, by
|
| 101.11 | | BINKLY::WINSTON | Jeff Winston (Hudson, MA) | Mon May 23 1988 21:28 | 17 |
| > From the Cover Letter:
>
> > In addition to being a source of instant credit, the CRT is overdraft
> > protection for your checking account. If you bring your checking
> > account negative, the CRT will replenish the account to a zero
> > balance.
>
Based on this, I would be (and was when I signed it) of the opinion
> that if I bounce a check, the money is coming out of the CRT 5000
> line of credit, not my savings account.
If you have a CRT. The flow for overdraft seems to be
IF H.E. exists - then tap, ELSE
IF CRT exists, the tap, ELSE
tap savings
|
| 101.12 | Their not out to get anyone... | WILLEE::GAGNON | | Wed May 25 1988 18:40 | 21 |
| I worked for DCU back when DCU was 6 months old (Jan. '81) up until
it was 3 years old (June '83). When I first started, DCU was a
simple credit union, they had savings, checking, and a few loans.
If a check bounced, there was nothing you could except pay the
overdraft fee. When DCU started the open-end loans (i.e. CRT 5000
and home equity) they figured it was better for their customers
if the overdraft hit the loan. The reason for this is: when a
check bounces at the credit union, they send it back to the bank
that paid the check. That bank usually submits the check the following
day and it will probably bounce again. This means within a few
days you bounced the same check twice, and at $6.00 - $7.00 a pop
that gets expensive. So you see, DCU figured, it's better to pay
a few cents in interest then to pay $12.00 - $14.00 in overdraft
fees. The reason the savings account is the last to be touched
is because, DCU requires you to open a savings account with at least
$5.00 in it, no matter what type of account you want to open. Most people
do just that, they put five dollars in their savings and never add
another penny. If a check bounces, DCU has to wait until a deposit
is made before they can claim the overdraft fee. A lot of banks
now have a reserve credit line that will bring your checkbook balance
back to zero and charge you interest if you use it.
|
| 101.13 | The real issue | BAGELS::LEVY | Living life at the margin | Thu May 26 1988 16:47 | 9 |
| re: .12
I believe the point of this note is that DCU chooses to make policy
decisions (default overdrafts to Home Equity, increase interest-earning
minimum on checking to $1000, etc.) without informing its customers
prior to implementing those decisions.
As many participants have pointed out, this is an excellent way
to lose customers (myself included).
|
| 101.14 | Opinions vary on many things | DR::BLINN | Bill & Opus in '88 (Penguin Lust!) | Thu May 26 1988 21:31 | 9 |
| Very few banks inform their customers PRIOR to making policy
decisions. I think the point of this note is that not everyone
is happy with some DCU policies, or don't read the policies
that apply to them, and would prefer to complain here than
to address the problem in a more constructive manner (either
by voting with their feet, or by working with DCU management
to change things for the better).
Tom
|
| 101.15 | | BINKLY::WINSTON | Jeff Winston (Hudson, MA) | Thu May 26 1988 21:45 | 14 |
| > Very few banks inform their customers PRIOR to making policy
> decisions. I think the point of this note is that not everyone
> is happy with some DCU policies, or don't read the policies
> that apply to them, and would prefer to complain here than
> to address the problem in a more constructive manner (either
> by voting with their feet, or by working with DCU management
> to change things for the better).
The problem is that DCU doesn't make their CURRENT policies visible
enough, and some of their policies could use improvement. We here are
being constructive by explaining to DCU in a straightforward manner
what we think they should be doing better or differently. The DCU BOD
and communications department get regular extracts of this file.
|
| 101.16 | Members | HACKET::KUSCHER | Ken | Fri May 27 1988 19:12 | 7 |
| > Very few banks inform their customers PRIOR to making policy
> decisions.
The DCU is not a bank it is a Credit Union. There is a
difference -- we are members not customers.
-kHk-
|
| 101.17 | I am also a customer | ARGUS::BISSELL | | Fri May 27 1988 19:23 | 3 |
| re .16
Are we not both members and customers and do we not deserve to be
treated as customers
|
| 101.18 | Hello DCU, are you there? | SALEM::ALIZIO | | Tue May 31 1988 17:09 | 31 |
|
re. .12
You make some good points relative to why DCU set up their overdraft
policy for CRT and Home Equity. I am sure that they had the noblest
of intentions in trying to save you money by not bouncing the same
check over and over again. However, I find fault with their logic
of defaulting overdrafts to the loans first. Given that some people
open up a savings account and never add to the $5.00 minimum, doesn't
preclude the logic of; IF not enough in checking GOTO savings, then
IF not enough in savings GOTO home equity. This is how I have my
account set up now. If all accounts were to have this default setting,
then for people who choose to keep the $5.00 minimum in savings,
they in effect are defaulting directly to their home equity. For
people like me who keep several hundred dollars in their savings
account, we have the added benefit of not bouncing the check at
all, plus not paying ANY interest on the overdraft. This scenario
fits both cases equally, and doesn't make any assumption about how
much or how little you have in your savings account.
I noted in one of the recent replies (forgot which one) that DCU
regularly monitors this notesfile? If so, that's good. Has anyone
received any direct feedback from DCU on any issues presented here?
Have any DCU policies changed as a result? I, for one would hope
that DCU will read this note and consider a policy change. I think
it's a rather easy one to implement, but it needs to be communicated
a lot better than the present policy. It's no fun to find out what
the policy is by accident, let me tell you. Well, I've got my fingers
crossed that a policy change is forthcoming.
|
| 101.19 | Going with the flow | WILLEE::GAGNON | | Tue May 31 1988 17:56 | 15 |
| RE: .18
What you said, does make a lot of sense. DCU should probably change
the policy and goto savings and then loan. Then again, they probably
already looked into this and found the majority rather have it the
way they're doing it now. A lot of financial institutions are going
to a reserved credit line. They don't give you a option of which
account you want overdraft fees to come from. Which ever policy
that institution follows, is the policy they offer you.
Even though we're members of the credit union, they have to set
rules. Otherwise, DCU would be a complete nut house, and most of
us wouldn't want to keep our money in a credit union that's constantly
changing. The only time they change now, is to keep up with the
economy. And all financial institutions do that.
|
| 101.20 | | SALEM::RIEU | Who gets custody of Chuck Sullivan? | Wed Jun 01 1988 12:43 | 5 |
| They may monitor this file but they don't seem to answer the
'tough' questions. We get a response from Mr. Tilley every few weeks.
But he only seems to answer 1 or 2 questions. We voted for these
people so I guess we deserve them.
Denny
|
| 101.21 | Official DCU Response | TSE::LEEBER | Knock Knock! | Wed Jun 01 1988 17:02 | 28 |
| This is an official response by John Tilley of the DCU. The portion of
that response, dated 1-JUN-1988, that applies is included below.
Whether you agree or disagree with the response from the DCU,
*PLEASE* remember I'm just the MESSENGER.
Carl Leeber
{I made a slight change in the official text, it is contained in
braces "{}" in the text below.}
******************************************************************************
A thorough explanation of the workings of the home equity line
of credit is contained in the "second mortgage line of credit plan
and loan agreement" which members sign at closing. See the paragraph
titled " using you{r} line of credit" on the back side of the document
for information regarding overdrafts and processing them through
the line of credit.
The CRT5000 (@ 16.25%) is replaced by the home equity line of credit
(@ 9.95%) to save members' interest expense when they use their
revolving credit. A 6+% saving seemed like a good idea to the
management of a "customer driven" financial institution.
The automatic overdraft protection of the CRT5000 and home equity
line of credit is designed to save members the embarrassment of
bounced checks and service fees of $12 for each NSF item.
******************************************************************************
|
| 101.22 | Don't shoot. I'm on your side. | SALEM::ALIZIO | | Wed Jun 01 1988 17:47 | 21 |
|
re. .21
I won't shoot the messenger, don't worry.
So that's the "official" response? All he did was re-state the existing
policy. He never addressed the relative merits of the points raised
in the previous notes. I guess it's a dead issue with DCU. I'm a
little disappointed in DCU's handling of this and the other two
issues that received "official" replies. If all we can expect is
a restatement of DCU policy, then there's not much point in going
into any detail on proposed improvements to the DCU. I'd like to
someone from DCU reply directly to the particular issues at hand,
rather than have them read policy out of some manual. Perhaps by
initiating some open dialogue, the DCU might be better for all of
us, including those who run DCU.
These are just my personal opinions on the subject and I'd be
interested in hearing how others feel about it.
|
| 101.23 | | ARGUS::BISSELL | | Wed Jun 01 1988 19:05 | 6 |
| re .22
I think that the response was well written and answered the question.
It is the lower interest rate option (look at the heat if they chose
the higher cost alternative to you)
The patron had to acknowledge the conditions and should have asked
questions if they were not sure BEFORE they signed the agreement.
|
| 101.24 | | SALEM::RIEU | Who gets custody of Chuck Sullivan? | Wed Jun 01 1988 19:15 | 7 |
| He didn't, however, explain WHY this overrides the previous procedure
of taking the money from savings. It seems to me that was
the major concern. It couldn't be that they get more of our money
in interest by doing it this way , could it? Nah, they wouldn't
do that to their 'valued' customers.
The guy would make a good politician.
denny
|
| 101.25 | hello? are you there? | BINKLY::WINSTON | Jeff Winston (Hudson, MA) | Wed Jun 01 1988 21:18 | 3 |
| given how many candidates found the ability to contribute to this file
when they were running for office, I would think that their absence
since then is at least embarassing?
|
| 101.26 | How about the 0% interest option? | SALEM::ALIZIO | | Thu Jun 02 1988 13:19 | 47 |
|
re. .23
You are missing the point. I am advocating the NO interest option.
Read, none, zero, nada. I don't want to pay 16% or 8%. I want to
pay 0% when I overdraft.
I discovered that the statement about the overdraft defaulting to
home equity is in fact on the back of the loan agreement. It's under
a section regarding how to use your line of credit. From the way
it's written, this is supposed to be an INTENTIONAL method for drawing
on your line of credit. That is, you intentionally write a check
for more than you have in your checking account and you automatically
write a loan; no muss, no fuss. The fault in this logic is that
DCU has no way of separating an intentional overdraft from an
accidental one. I personally do not want this convenience. At the
closing the DCU representative should advise you that you have the
option of not having this convenience if you don't want it. In fact,
the reason I didn't pick up on this little ditty was that I asked
how to draw on the line of credit, before I read the agreement.
I was informed of two ways to do so, not including this one. When
I read the agreement and got to that section, I skipped it since
I thought I was just told how to draw on my line of credit. If I
had been properly informed I would have chosen NOT to have the
convenience of taking out a loan by intentionally writing an overdraft.
Now don't get me wrong, I'm not suggesting that the DCU representative
was being purposely misleading, but I think that in the future this
option should be brought to the customer's attention. Then the customer
could make an informed decision and not rely upon their contract reading
comprehension skills, which for many of us are weak at best, not
being lawyers.
I'm still not satisfied with the response from DCU. I got the feeling
that they thought they were doing me a favor by defaulting overdrafts
to home equity rather than CRT. I'll say it again; I want option C
of defaulting to my savings and paying NO interest. I realize that
this may result in slightly less revenue for DCU, but I don't think
they want to get interest from people who unintentionally overdrafted.
For those who prefer this convenience, all well and good, but for
the rest of us, please give us the option of refusing it at the
time of closing. And this means pointing out this feature, not relying
upon the customer to figure it out for themself.
Does anyone else feel that paying 0% interest is better than 8%
or 16%? Maybe my viewpoint is a little slanted, but it seems fairly
reasonable to me.
|
| 101.27 | | SALEM::RIEU | Bill the Cat in '88 | Thu Jun 02 1988 16:19 | 4 |
| You can fefuse it by sending them a letter stating you want to
use your savings for overdraft. But, you can't do so unless you
know of their 'feature'.
Denny
|
| 101.28 | An open letter to DCU. | SALEM::ALIZIO | | Fri Jun 03 1988 12:41 | 55 |
|
An open letter to all DCU representatives and/or BOD members.
To whom it may concern:
By means of this letter I hereby solicit your input on the
subject note. Specifically, the heart of the matter centers around
the option listed on the back of the home equity loan agreement
that provides the capability of drawing on your line of credit by
intentionally writing an overdraft on your checking account. By
signing this agreement, the customer is making their line of credit
the first option in an overdraft situation. For those who choose
to avail themselves of this convenience, it's all well and good.
Those who don't can simply write a letter to DCU requesting that
the first overdraft default go against their savings. This is an
existing DCU policy.
My request is a small one, and doesn't involve either a policy
change or any alteration to the loan agreement form. Very simply,
I'd like to ask if your DCU representatives could point out this
option at the closing, before the loan agreement is signed. Then,
they should inform the customer that they have the option not to
have this form of default. I'm not sure if the customer would still
have to draft up a letter to decline this option, or whether a verbal
declaration during the closing would suffice. I'd leave that up to
your judgement as their may be legal implications to deal with.
Could you please address yourself to this issue as soon as
possible, and post your reply here?
Thank you.
Sincerely,
Paul Alizio
|
| 101.29 | My feedback on the overdraft issue | VOYAGE::JWHITTAKER | | Fri Jun 03 1988 17:05 | 20 |
| As in any business transaction, it is the responsibility of both
parties to ensure their interests are protected. By asking the
DCU to assume the responsibility of ensuring that the signee of
a business transaction of this type, the burdon is shifted from
both parties to a single party, namely the DCU, which I believe
is inappropriate. The agreement in question clearly indicates that
overdrafts will be covered by the equity line of credit. The DCU
has no meaninful way to ensure that any overdraft is either intentional
or the result of an error by the writer of the check. The burdon
of responsibility must be placed on the participating member to
notify the DCU in writing to first utilize savings to cover a
short-fall in his/her checking account, than look to the equity
line of credit as secondary source to cover the overdraft. I think
you are asking too much of the DCU to assume this responsibility,
and that an alternative method is available to the member to notify
them in writing of how each individual member wishes to have overdrafts
covered. You asked, so this is my opinion.
Jay
|
| 101.30 | Very small additional responsibility for DCU | SALEM::ALIZIO | | Fri Jun 03 1988 19:54 | 27 |
|
re. .29
The only additional responsibility I have requested from DCU is
that they inform their customer that they can decline the option
of having overdrafts trigger an advance on their line of credit.
From then on it's the customer's responsibility to generate the
official letter to DCU informing them of how they wish overdrafts
to be handled. That's it. The DCU's responsibility ends there. If
the customer overdrafts more than what's in their savings account
then they either bounce the check or hit their line of credit,
depending upon how they set up the overdraft protection.
In a nutshell, the total additional responsibility to DCU amounts
to maybe a 30 second explanation during the closing in which they
inform their customer of this option. Since it doesn't say on the
loan agreement form that you have the right to decline the overdraft
option, I think it's only fair to point out this hidden option.
If I had been given this option at my closing, I would have declined
it and saved myself some grief (and money) in the process.
I sincerely hope that DCU will not consider my request to be burdensome
or unreasonable. It certainly doesn't seem so to me. And thanks
for taking the time to reply. I appreciate your input. Now, if only
DCU will happen by and give their input.
|
| 101.31 | | SALEM::RIEU | Bill the Cat in '88 | Mon Jun 06 1988 13:31 | 5 |
| EXISTING policy is to cover overdrafts with my savings account.
Why does this automatically change if I take out a certain loan?
The DCU 'burdened' themselves with this change of policy. Why should
it cost the customer money?
Denny
|
| 101.32 | You can't please all the people all the time | DR::BLINN | Opus for VEEP | Mon Jun 06 1988 19:37 | 37 |
| Denny, AS SOON AS YOU ACCEPT THE LINE OF CREDIT, the policy
changes. By signing the "line of credit" agreement, you agree
to the change. It's not unreasonable to ask the DCU to clarify
this, and to make it clear that you have the option of telling
them you want it handled differently.
Many people who take out the "line of credit" want it handled
the way it's being handled. Others don't. What the DCU is
being asked to do is "EDUCATE THE CONSUMER", that is, make
sure that the customer understands the options. That's very
reasonable. And they're setting up a default that's probably
right for many people. Some people DON'T WANT THEIR SAVINGS
TOUCHED.
No one approach is going to please everyone. What's important
is that the DCU let people have it done the way that works
for them, and makes sure people understand what will happen
if they don't specify something else.
To make a comparison to fast-food: I usually go to Burger King
rather than McDonalds or Wendys or Brand X, for two reasons: I
prefer broiled to fried, and I like to specify options. At Burger
King, I usually order the Whopper with Cheese, and I *HATE*
mayonaisse. Rather than telling Burger King they should stop
putting mayonaisse on the Whopper, I remember to tell them to
leave it off the one they're making for me. They do this with no
problems. And if I want extra onions, no problem, just ask. But
if I forget to specify the options I want (NO MAYO!), I don't get
upset and make a fuss, because, after all, I was the one who
screwed up.
Some of us seem to expect DCU to change the default, because we
didn't read a legally binding contract carefully enough, and
trusted someone else to tell us what it said. That's not being
very reasonable.
Tom
|
| 101.33 | | ARGUS::BISSELL | | Tue Jun 07 1988 15:14 | 13 |
| re .32 and others
Please read the card that is included in your statement this month.
I don't have a line of credit with the DCU but would be further
confused by the "explanation".
What I understand is that Federal Requirements will allow no more
than three overdrafts against your SAVINGS in any one month and
afer that they will be taken from your Line Of Credit. There is
a statement that a $12.00 charged will be assessed for all overdrafts
that are not covered. Does this mean for 1. all over the three,
2. all, 3 all that there are no funds in the Line of credit either.
Can someone please translate this for me ?
|
| 101.34 | What the notice says | DR::BLINN | Let them eat barbecue | Tue Jun 07 1988 21:06 | 41 |
| Here, verbatim, is what was in the statement this month:
IMPORTANT NOTICE
Under Federal Regulation D, all financial institutions are
required to limit the number of overdraft transfers FROM primary
savings (share 1) TO any sharedraft (checking) accounts. The
number of overdraft transfers *cannot exceed three (3)* per month.
(*underlining in original*)
After the third overdraft transfer, each sharedraft (check)
received must clear directly through your sharedraft accounts or
lines of credit. If there are insufficient funds, all checks will
be returned and the account charged $12 per item.
Please maintain proper balances in your sharedraft accounts.
[end of notice]
What this means is that AFTER THE THIRD OVERDRAFT IN ANY MONTH
that was charged against "primary savings", any subsequent
sharedraft that's presented for payment WHEN THERE ISN'T MONEY in
the sharedraft account to cover it WILL BE RETURNED, even if there
is money in savings to cover it.
If you draw against your lines of credit first, this can only
happen after you've exhausted your lines of credit.
Presumably, if you've specified a search order that puts savings
before the various lines of credit, it will bounce after the third
transfer from savings, even if there's money in the lines of
credit. Maybe not. You would have to ask the person who wrote
the code that implements the fall-back logic, I suspect. It might
be smart enough to check the lines of credit if the "no more than
three transfers from savings in one month" rule applies.
This is obviously a good reason to have the default be to go
against lines of credit FIRST, since they don't have such a
restriction.
Tom
|
| 101.35 | Good topic for another note! | SALEM::ALIZIO | | Wed Jun 08 1988 15:09 | 30 |
|
re. .34
I think this is an excellent candidate for a separate note. While
it does relate to this note, it bears further examination in and
of itself. I cannot imagine the logic the Federal government used
to determine that there must be ANY restriction on the number of
times I can dip into my savings account, whether for overdraft
or any other reason. This seems totally unreasonable to me. If
there wasn't a banking lobby behind passage of that law, I'll eat
my hat! I'd like to learn more about Federal Regulation D; how it
came about and what else it covers. Perhaps others mat be curious
as well. I'd rather not cloud up this note with those discussions
though. This note has boiled down to a simple and reasonable request
of DCU and I vote against confusing the issue by debating the
relative merits of the Federal regulation.
For myself, I don't see the limit of 3 transfers out of primary
savings per month to cover overdrafts as being a particular problem.
If I overdraft more than once or twice a year it's very unusual.
I feel perfectly safe, even with the limit of 3. Again, it goes
back to personal choice and if I choose to take this somewhat increased
risk, that's my business.
Hopefully DCU can address themselves to the request I posted in
an earlier note. They are very conspicuous by their silence.
Please give some thought to creating a separate note based upon
the content of 101.34 . Thanks.
|
| 101.36 | I drew a different conclusion. | SALEM::ALIZIO | | Wed Jun 08 1988 15:53 | 54 |
|
re. .34 (again)
> What this means is that AFTER THE THIRD OVERDRAFT IN ANY
> MONTH that was charged against "primary savings", any
> subsequent sharedraft that's presented for payment
> WHEN THERE ISN'T MONEY in the sharedraft account to cover
> it WILL BE RETURNED, even if there is money in savings to
> cover it.
After rereading your conclusion, and the following quotation
from Regulation D, I disagree with the last part of your
statement. After the third overdraft in any month that's
charged against "primary savings", any subsequent overdraft
will NOT result in the automatic return of your check and the
resultant $12 charge per item. This is the case only if you
DO NOT make your line of credit the SECOND default. If your
line of credit is your SECOND default, then after the third
overdraft from primary savings, you go against your line of
credit. I'll repost that portion of the regulation that covers
this, below. Based on my interpretation of the regulation and
the existance of a secondary default as a backup to your
"primary savings", I don't see any increased risk at all under
the new regulation. That's not to say that I don't disagree
with the limit of 3 overdrafts from savings, but it's very
manageable.
> After the third overdraft transfer, each sharedraft (check)
received must clear directly through your sharedraft accounts
OR lines of credit.
--
The key word in the above is the OR. I take this to mean that
after the third overdraft transfer it's OKAY to overdraft
again, only through your line of credit, rather than savings.
If you DON'T have your line of credit as the SECOND default,
that's where you start incurring the returned checks and the
associated $12 fee per item. I've read this several times now
and I still come up with my conclusion, rather than yours.
Perhaps others can add their interpretation, but it seems
fairly clear to me now that I've had time to digest it.
Based on my conclusion, your conclusion that "This is obviously
a good reason to have the default be to go against lines of
credit FIRST....." an invalid conclusion. I think we're almost
where we were before this regulation surfaced except that there's
this artificial barrier of 3 overdrafts from savings being
imposed. I think I can deal with the regulation, even though
I strongly disagree with it.
This HAS to go to its own note. I know there's going to be
some lively discussion on it!
|
| 101.37 | All that matters is the program that does the work | DR::BLINN | Let them eat barbecue | Wed Jun 08 1988 20:15 | 22 |
| As I suggested in my note, it depends ENTIRELY on how some
computer program has been written. The processing isn't done by
nice little old ladies, it's done by a program. Our guesses about
what the program does are largely irrelevant. Since I don't have
any DCU line of credit, and don't overdraw my account, it's really
irrelevant to me which way it works, but if you really care, you
could find out by deliberately writing checks that will test it.
If I'm wrong, I'll pay you for the first $12 "returned check"
charge.
Alternatively, you could try to find out who wrote the program
and what rules it really uses. I *very strongly* suspect that
it's not clever enough to check for lines of credit after it's
hit the "three overdrafts in one month against primary savings"
rule.
Also, I would have expected to see the word "AND" instead of
"OR" in the place you indicate, to provide the sense you read
from the notice. But it's really irrelevant -- all that really
matters is what the program does.
Tom
|
| 101.38 | News from DCU operations | SALEM::ALIZIO | | Thu Jun 09 1988 19:40 | 14 |
|
re. .37
I checked with DCU operations and they confirmed that the code will
keep track of the 3 overdrafts in a given month and hit the line
of credit (if there is one) on the fourth and subsequent occurances.
If you have no line of credit, the checks bounce and you get hit
with the $12 fee per occurance. This confirmed all my conclusions
as previously stated.
You can still send me that $12 if you want. 8^)
BTW I posted a note in the CONSUMERS notesfile about this Regulation.
|
| 101.39 | Hey DCU, Where are You? | SALEM::ALIZIO | | Thu Jun 09 1988 19:42 | 8 |
|
Hey DCU, Where are You? (That's supposed to rhyme) 8^)
How about replying to my open letter?
Paul Alizio
|
| 101.40 | | BEIRUT::SUNNAA | | Thu Jun 09 1988 19:52 | 25 |
|
I wish DCU makes up their mind.
I usually use Baybank for my checking, but I wrote 2 checks from
my DCU account, and didn't bother transferring money from my savings
at DCU to my checking, and waited to see how it would be handled.
The money wasn't taken out from my savings, but from my CRT.
I called DCU and I was told that if there was 0 balance in my checking,
the money will be covered from CRT first and then if there wasn't
enough from CRT they would take it out from savings, and that they
would take it out from Savings only 3 times a month. After that
it will bounce.
If you have Equity, they would close up your CRT (Because as this
person told me "why would you need CRT if you have several thousands
in your equity available to you"), and they would take the money
to cover the checks from equity.
I better stick with my baybank accounts, at least I know how things
are handled.
Nisreen
|
| 101.42 | Worth the reposting... | BINKLY::WINSTON | Jeff Winston (Hudson, MA) | Fri Jun 10 1988 02:09 | 37 |
| <<< ALIEN::BLKHOL$DUA6:[NOTES$LIBRARY]CONSUMER.NOTE;1 >>>
-< Consumer info exchange -- for Digital employees >-
================================================================================
Note 1154.5 Federal Regulation D 5 of 5
TOKLAS::FELDMAN "PDS, our next success" 30 lines 9-JUN-1988 18:32
--------------------------------------------------------------------------------
The regulations involved are more complicated than simply limiting
overdraft protection from savings accounts to three times a month.
The whole point of this part of the regulations is that savings
accounts are savings accounts, checking accounts are checking accounts,
and never (well hardly ever) the twain shall meet. Savings accounts
are not supposed to be used as checking accounts, and that is the
intent of this rule.
I remember when federal regulations prohibited interest on checking
accounts altogether. Then they deregulated a little, and checking
accounts were allowed to pay interest, but they always had to be
at least a quarter point less than savings accounts. With the current
state of interest rate deregulation, these differences have
disappeared. So from the point of view of the consumer, I can see
how you might object to a rule that seems obsolete.
However, there are still reasons for the rule. They're just not
very visible to consumers. In the case of a banking emergency,
the rules under which you can get your money out are different for
the two types of accounts. They're treated differently for the
money supply, and it wouldn't surprise me if they were treated
differently for the purposes of calculating the banks' insurance
premiums to the FDIC/FSLIC/etc.
Besides, given that the DCU pays more interest on draft accounts
than on savings accounts, why would you want to have a lot of money
in your savings account? (Why they do this is beyond me; most banks
pay more for savings than for checking.)
Gary
|
| 101.43 | The check's in the mail :^) | DR::BLINN | Let them eat barbecue | Fri Jun 10 1988 02:31 | 5 |
| Paul, thanks for getting a real answer from DCU operations.
Is your mailstop in ELF accurate?
Tom
|
| 101.44 | I can use the $12, thanks. 8^) | SALEM::ALIZIO | | Fri Jun 10 1988 13:09 | 7 |
|
Tom, yes my mailstop in ELF is accurate. I don't think I'll wait
by the mailbox in breathless anticipation waiting for your check
to arrive though! 8^)
Paul
|
| 101.45 | Yoo-hoo, are you there? | SALEM::ALIZIO | | Fri Jun 10 1988 13:12 | 6 |
|
Yoo-hoo DCU, where, oh where, oh where R U? (Not any better than
yesterday's rhyme, but maybe they'll answer soon.) 8^)
Paul
|
| 101.46 | | SALEM::RIEU | Bill the Cat in '88 | Fri Jun 10 1988 18:02 | 3 |
| Paul,
Why not call John Tilley? He's at DTN 223-6735.
Denny
|
| 101.47 | John Who? and Valid Busy Signal? | TSE::LEEBER | Summer Fun!! | Mon Jun 13 1988 13:53 | 25 |
| RE:.46
Please take note (note 103.0) that John has left (is leaving) the DCU.
His replacement is Mary Madden. I'm told the number has not changed.
It is (dtn) 223-6735 extension 239 (you can dial the extension on
a TOUCH-TONE phone as soon as the automatic operator answers the
main number).
RE:.45
The DCU does not directly participate in this conference. Instead,
a relay of information is provided by volunteers. I would also guess
that with John Tilley's pending or actual departure, that Mary Madden
has a number of transition activities taking up her time.
I would say there is a choice in actions. The first might be to
be patient, I'm sure either John or Mary will respond in time. A
second option might be to call John or Mary and get the answer (as
suggested in .46 by Denny).
Should you opt to call, you might decide to join the legions of
"happy" volunteers in this conference by sharing what you discover.
Carl
|
| 101.48 | Official DCU Response | TSE::LEEBER | Summer Fun!! | Mon Jun 20 1988 14:40 | 41 |
| This is an official response by Mary Madden of the DCU. The portion of
that response, dated 18-JUN-1988, that applies to this note topic is
included below. See note 2.22 for more information.
Whether you agree or disagree with the response from the DCU, please
either direct your comments to the DCU directly (dtn-223-6735) or
post your comments as a REPLY to this entry in this conference.
Carl Leeber
******************************************************************************
To answer the open letter ...
regarding the overdraft policies and options available to DCU members,
I'll start with a reiteration of the Federal Regulation D notice
enclosed in May's sharedraft statements:
IMPORTANT NOTICE
Under Federal Regulation D, all financial institutions are required
to limit the number of overdraft transfers FROM primary savings
(share 1) TO any sharedraft (checking) account. The number of overdraft
transfers cannot exceed three (3) per month.
After the third overdraft transfer, each sharedraft (check) received
must clear directly through you share draft account or line of credit.
If there are insufficient funds, all checks will be returned and
the account charged $12 per item.
Please maintain proper balances in your sharedraft account.
-$-
This regulation nets out to mean even if you select the "savings
first" option for clearing overdrafts, the fourth overdraft in a
month will automatically go to your line of credit.
New informational literature is being generated to inform all line
of credit applicants of their option to select either the "savings
first" or "line of credit first" option for overdraft clearing.
The member's signed intent is still required.
******************************************************************************
|
| 101.49 | Making a difference | TSE::LEEBER | Summer Fun!! | Mon Jun 20 1988 14:46 | 11 |
| RE:. 48
>New informational literature is being generated to inform all line
>of credit applicants of their option to select either the "savings
>first" or "line of credit first" option for overdraft clearing.
I would say that this literature is a result of the input provided
by this notes conference. From small beginnings....
Carl
{as just a humble noter}
|
| 101.50 | Now THAT'S a response! | SALEM::ALIZIO | | Mon Jun 20 1988 18:19 | 12 |
|
re. .49
Well, it is nice to know that my letter did some good. If we had
settled for the initial "official DCU response" it may never have
happened.
Thank you, Mary and all those who helped to fan the winds of change.
Regards,
Paul
|
| 101.51 | A Little Accomodation never hurts | 28815::BEKELE | Be reasonable, do it MY WAY! | Tue Dec 06 1988 17:36 | 9 |
|
Why can't DCU pay a check from regular savings
when there is enough fund in it but you have
exceeded the 3 overdraft limit and then charge
you with handling fee instead of returning the
check?
Dan (who_is_paying_too_much_for_being_forgetful)
|
| 101.52 | | TOKLAS::FELDMAN | PDS, our next success | Tue Dec 06 1988 22:23 | 8 |
| re: .51
Because Federal laws and/or Federal Reserve Board policies make
distinctions between the two types of accounts, and prohibit the DCU
(and other banking institutions) from using your savings account as a
secondary checking account.
Gary
|
| 101.53 | Could be very dangerous to your financial health | DPDMAI::AINSLEY | Less than 150 kts. is TOO slow! | Wed Dec 07 1988 01:33 | 18 |
| I have an account at a bank (FDIC) where an overdraft in checking
is automatically taken from savings.
There is a potential problem with this: Someone gets one of your
blank checks and writes it for say, $5K. You have insufficient
funds in checking, so you life savings get cleaned out to cover
the check. Of course now, your checking account has a zero balance,
so all the valid checks you wrote, get their funds from savings
too. Not very nice. This could go on until your savings were wiped
out, or you decide to check you balance in savings, or you get your
next monthly statement. In any case, I would not want to be the
employee at DCU that takes your VERY irate call after all this.
BTW, it was this possible situation that caused me to decouple my
checking and savings account. I will just eat the service charges
if I screw up and start bouncing checks.
Bob
|
| 101.54 | Is it that easy? | NEWVAX::PAVLICEK | Zot, the Ethical Hacker | Wed Jan 25 1989 20:47 | 9 |
| re: .53
Is it true that the bank has *NO* liability for processing a check
with a forged signature? I was always under the impression that
the *SIGNATURE* was the authorization, not the blank *DRAFT*.
Anyone know for certain?
-- Russ
|
| 101.55 | | TOKLAS::FELDMAN | PDS, our next success | Wed Jan 25 1989 21:46 | 13 |
| My understanding (which isn't authoritative) is that the bank is
liable for forged checks, but you have an obligation to bring it
to the bank's attention in a timely manner. If you wait six months
after a forged check clears and then start bouncing checks because
of the forgery, the bank would likely assert that they're only liable
for the amount of the forged checks, but you're liable for all of
the costs associated with the bounced checks, since it's your fault
for not telling them.
Of course, this is likely to vary from bank to bank and state to
state. I suggest asking several banks, to get several opinions.
Gary
|