I received a notice from one of my banks, today. They included a notice that beginning March 19th, they will begin processing my checks nightly from highest to lowest. They claim that this policy is enacted to ensure that my most important checks get paid first. This is pure BS. I hate this policy and have to vent some. I apologize for taking up your time with it, but I want everyone to know the real reason for this policy.
The truth is that they process from highest to lowest so that your balance will go down as fast as possible. The reason this is significant is because of bounced checks. Banks know that it is the large checks that will pull you under your limit. So if you make a mistake in your balancing, they want as many checks to bounce as possible. Since they charge $20 per check and not some percentage of the amount, they want you to incur the charge on as many checks as possible. That way, instead of bouncing one check and charging you $20, they bounce five checks and charge you $100.
The fact is, though the large checks do tend to be most important, they are also the ones where you have the most leverage and where you have the greatest relationships. If my check to my landlord bounces, all I have to do is call them up, apologize and write a new check. It's much worse for me if I bounce a check at the local grocery store because they'll just put me on a list and begin refusing my checks.
Another aspect of this scandal is the $20 fee. It costs the bank maybe $0.30 per bounce. It isn't like they have to pay a clerk to go through each individual check and hand-write a notice to you. The biggest cost is the postage for the notice they send to you (after two days delay--got to let those fees build up)--and even then, they don't send you a notice for each check, just one notice to let you know you screwed up.
So they make $100 on something that costs them maybe $1 to process.
The problem is that this policy only hits people who are too stupid or undisciplined to track their bank balance. That's apparently a safe group of people to rip off on an institutional basis. Chances are, they won't notice the real effect of the policy. And if they do, they won't want to broadcast their lack of intelligence or discipline to alert others. The proof of this is that consumers in Nevada (who are apparently not ashamed of being stupid or undisciplined :) got wise and enlisted the state government in the cause. I don't like the method, but it is enlightening to know that they are the only state USBank is in that requires checks to clear lowest to highest.
Anyone know a bank with this policy on a voluntary basis? I'd be happy to throw my business their way...
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