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Overdraft Protection Is A Good Thing
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The NYT Bucks blog published a post today warning us that banks will start direct mail promotions to get customers to opt into their overdraft protection. While they don’t explicitly say overdraft protection is a bad thing, they do want to help protect against some fear mongering on the part of banks. I think that’s a good thing, we need to keep banks in check, however I also think that opting into overdraft protection is a good thing.
It’s no secret that banks make a ton of money off overdraft fees but it’s one of the fees that you are 100% responsible for. It’s like over-the-limit fees by credit cards, it’s 100% your fault that you overdrafted your account. Not only is it entirely your fault, it is usually better for you to pay the overdraft fee than to have the check bounce. I think there should be limits to how many overdraft fees you should be charged in a particular day (you write three checks, you should only be hit with one overdraft fee and two bounced checks… not three fees), you probably want your mortgage or rent check to go through even if you’re short a few dollars. (plus, you can always ask to have the fee waived if you don’t do it often)
Overdraft fees hurt. At an average of thirty bucks a pop, that’s more than an hour or two of work (if not three or five after taxes) for many people. You shouldn’t be someone who “overdraws your account with any regularity” and at $30 a pop, that alone should be enough to change your behavior. If it isn’t and you still overdraw with any regularity, then it’s probably not that important to you anyway.
When people lambaste banks for earning money this way, remember that this is a case where it’s the customer’s fault. Banks might play some games to maximize their revenue, but it still starts with someone writing a bad check.
When I get that letter, chances are I’ll be opting in.
What do you think about overdraft protection? Scam? Safety net?
{ 73 comments, please add your thoughts now! }
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I think overdraft protection can be a beneficial feature but it can also be manipulated and abused by banks.
I haven’t ever paid an overdraft fee that I can recall. Certainly none in the past 10 years. The way I look at it an overdraft fee is $10 and a bounced check is $33 yet with the overdraft my check is paid. I would opt into overdraft protection. Not long ago my wife and I both simultaneously moved a large sum of cash out of our checking account. I paid a bill and she transfered money to savings. If we hadn’t caught that the same day then it would have been very easy for another bill to come due and for our balance to be empty and in that case overdraft protection would have been nice.
Of course if you’re using a debit card a lot, living paycheck to paycheck and you aren’t watching your balance then overdraft fees can add up. And if the bank processes things a certain way then they can manipulate it to maximize the fees. But when it comes down to it people paying overdraft fees are usually doing so cause they spent more money than they had to spend and generally that is their fault not something out of their control.
As long as you know what you’re getting into, they can be a safety net. Stuff happens. And sometimes you need a safety net when it does. We pay $10 yearly for our overdraft protection. There are no fees when it kicks in other than a 18% interest rate on outstanding balance. Much better than $25 an item or, worse, returned (or denied) debits.
I once had a roommate who lived paycheck to paycheck like this every month for years, but he also always had to have the latest Macbook, iPod, etc, etc. At one point he bought a PSP, and then his rent check bounced later that week.
Just don’t buy junk you don’t need, this would solve a lot for most of you.
I strongly disagree with you. If you are a heavy user of debit cards with a relatively low balance from living paycheck to paycheck, it’s very hard to keep track of your actual balance. Even if you log into the bank website or check the balance on the ATM several times daily, it’s still uncertain what your actual balance is.
I’ve personally seen some transactions that don’t post for days after I have made them; and even once they post, it takes several more days at best to clear.
If you go over a $1, you owe $30? If you have 20 transactions that haven’t cleared yet and you go a little negative, then everything clears immediately and you owe $600? This isn’t hypothetical, these things actually happened to me and I am sure worse things have happened to others.
There is no possible moral or technical explanation for these exorbitant fees. For a while, I had a Bank of America CashPay card. It simply stopped working when there was no more money. Simple. Fair.
The only fees I could see the bank charging is maybe a small transaction fee ($5?) and a relatively high interest rate.
“Entirely your fault”? Please, if you can’t trust the ATM or your banks website, it’s basically like the system is lying to you and at the same time trying to make you feel bad for not noticing.
If you keep track of your spending, then you know exactly what your balance is. If you started with $100 and you charged $10, you have $90. The charge may not be reflected in your balance when you check online but you personally must know.
We can argue over the exorbitance of the fees (a $30 fee is high, regardless of how much you go over) but to claim a customer isn’t responsible because charges don’t post fast enough is itself not fair. You can’t shift accountability over your own finances.
The ATM isn’t lying, it’s just not as fast as you want it to be.
I agree that it’s 100% personal responsibility to keep track of how much you have and how much you spent. It doesn’t matter what your posted/available balance is, because you should be keeping track of how much you spent and many retailers/restaurants do a bulk submission at the end of the day or even wait a few days before submitting charges.
Granted, banks do play the shuffle game with deposits and withdrawals to maximize fees, but this situation doesn’t apply to Tom, as he doesn’t even know how much money he has or has spent.
Example
$500 in account. ($500)
Write a $200 check. ($500 – $200 = $300)
Deposit $700. ($300 + $700 = $1000)
Write $700 mortgage check. ($1000 – $700 = $300)
What actually happens is:
$700 debited first, triggers overage fee. ($500 – $700 = -$200 – fees)
$200 debited second, triggers another fee. (-$200 – $200 = -$400 – 2 x fees)
$700 finally credited. (-$400 + $700 = $300 – 2 x fees)
Tom,
It is the responsibility of the account holder to balance their own checking account.
However I do agree some banks have been a bit slimy in how they handle overdrafts to maximize the fees. But when it comes down to it any negative balance is a negative balance that should trigger a fee under the rules of the system. Its not unethical to charge you a fee under the rules of your account that you agreed to.
If you are living paycheck to paycheck with a low balance and can’t keep track of your balance then you should use CASH instead of a debit card.
You based your argument on using debit cards. If that causes a person to overdraft, then shouldn’t they be learning from life and not do it again? Shouldn’t they switch to checks? Laziness is not an excuse for irresponsibility.
Actually, and this actually underlines your point, Jimmy, they shouldn’t use checks, either. What posts slower than checks? Unless the payee cashes it immediately, it could be days, weeks before you see it reflected in your account.
No, the person for which this is a problem should either use cash, or, ironically, a credit card. That’s the only way around getting hit with overdraft/bounced check fees if they don’t want to track expenses. Just need to watch out for finance charges if you use option #2…
Bottom line….track your spending!
I guess I’d better knock on wood before saying this, but if you’re the kind of person who needs overdraft protection, it might be better to fear the overdraft charges. Chances are, it will keep you from overspending too often. I know a few people who use overdraft as a payday loan, rather than a hedge against mistakes.
People really ought to be able to figure out how to keep enough money in the bank to cover their charges.
Come to think of it, my bank offers free overdraft protection, so if you want it, you really ought to shop around for a bank that won’t charge you for it.
My credit union has a “checking line of credit,” so if I overdraw, I just have a small 13% loan for the overdrawn amount. So if I go over by $500 for a week or so, it’s about $1.25 in interest.
Of course a credit union is unlike a bank in that it’s there to serve me, not extract money from me.
Sounds like free overdraft or a more reasonable fee structure ($5 for the service, 13% interest on the loan) might be a more equitable way of running a system.
When I think of Overdraft protection I think of the account that is protected by another account. Bank of America charges $10 transfer fee for overdraft protection but it is free if I transfer the money myself from savings to checking. I have an issue with that.
The Overdraft fee you pay for insufficient funds…my only issue is the fact that most banks process the largest transactions first instead of the order they come in. The customer gets hit with more fees that way…unfair.
I once wrote a check and forgot to move money over to checking to cover it. The company TWICE tried to cash it before I found out what was happening. They hit me with a $35 fee for each bounce and the bank another $25 per. OUCH!
I instead set up a $3,000 credit overdraft protection. I did have to commit these funds to do this. I still earn interest but it protects me against another such hit.
Bill
I believe that it is standard practice for banks to try an insufficient funds check twice, but this is the first I’ve heard of charging for both tries.
I’ve had it for many years.
It costs essentially nothing – except for interest charges on the cash borrowed. It’s a great safety net.
Plus, it’s a cheap loan if strapped. Better than a credit card.
I don’t think overdraft protection is a scam OR a safety net. Simply put, I think it’s a way for banks to make more money. What I have an issue with is the way it’s often marketed — as a way to help customers out, rather than as a fee for customers screwing up.
I won’t be opting in, because I prefer just to keep my accounts balanced — and not opting in is added incentive to do so. But I can see how sometimes overdrafts happen and it’s not the customers fault — such as when a person deposits a paycheck that later turns out to be bad.
I have the overdraft protection on my ING Electric Orange account – up to $150 or so. I’ve only ever used it once (charged groceries to the wrong card – whoops), and it was nice to have that safety net there. Plus they don’t charge me anything for it. I’m not sure if I’d pay for overdraft protection, unless it was a pittance like the $10/year Beating Broke has.
Keeping a balanced bank account isn’t some sort of civic duty. The bank is providing a service in exchange for holding your money. If we were to speak of fair contracts, there is no way an overdraft causes a bank $35 in damages.
No, it’s a systemic price fixing of fees. Most knowledgeable / well off people don’t complain, because they are not the ones affected. Also, most arguments that are used against payday lending can also be applied here.
Also, this might be a generational thing, but I don’t know a single person who keeps a running ledger of their debit card use. Most rely on the ATM, website, phone, phone app, etc.
There is an implicit assumption that when you ask your bank for the balance, that it should be correct at that time. Businesses should be required by law to post transactions immediately. Batching transactions may save money, but it introduces incredible amounts of randomness and lag in the system. It’s possible and not cost prohibitive, I mentioned earlier some cards have this feature already.
Furthermore, most banks send notifications of overdrafts after the fact. Which is kind of a joke. If they really wanted to be helpful, they would notify you went something posted that will cause an overdraft, so you would at least have a couple hours to try and fix it before the transactions clear.
Sounds like you want these transactions to fully process instantaneously, as if the technology were there yet? Not sure if you noticed, or not, but not even credit cards do this…
No, rather, if you can’t keep track of what you are spending, it sounds like you should be using cash instead of even a debit card.
I want to know what my balance is at all times. So I keep track of all my transactions. Yes, that means I keep a running ledger of all my transactions. That’s what that little booklet the bank gives you (for free, by the way) is for.
Maybe it’s a generational thing, but I’ve been doing this since I’ve had a bank account (early teens), so maybe not.
Look, you clearly acknowledge how the system works. You may not like how it’s set up, but you ARE aware of how it works. Even with that knowledge, you still want to push the responsibility for incurring these fees back on the bank? The bank has told you that a certain action has a cost, you take that action and then are upset when you are charged?
Personal responsibility has to enter the picture somewhere.
Trust me, the technology is there. Furthermore, I am aware of how the system works, what I am saying is that the system is unfair. Would you still have the same argument if it was $100 or a $1000 fee? Where does $35 come from? It’s not from any sort of economic damage to the bank. I’m all for paying a penalty, but it should be a fair penalty.
It’s not a civic duty but it’s a personal responsibility. I understand your argument that you want transactions to post immediately but that’s not how it works, so consumers have to adjust to how things work. If we forced instantaneous transactions and it were somehow cost prohibitive, then vendors wouldn’t accept those cards as payment. Or, if they did, prices would be higher all around. Either way, it’s a loss for the consumer.
It’s also not a systematic price fixing of fees because lots of people have commented that they pay a small fee for overdraft protection and then a high interest rate while they’re negative. So plans do exist, the vast majority of customers seem to prefer the $35 per overdraft variety.
Yes, those plans exist, assuming you qualify for them. Not everyone has the same options you do.
“Furthermore, most banks send notifications of overdrafts after the fact. Which is kind of a joke.”
Of course they notify you after the fact. They can’t notify you before the fact or instantaneously.
No, they could notify you before the transactions clear. I don’t think you understand. You can go negative, but still deposit money into the account or transfer money from another account before the end of the day.
How is the bank supposed to know whether or not you’ll deposit? Until you do, they’ve extended you a short term loan. Banks can’t do that as a matter of practice without charging a fee to cover the risk. Is $35 high? Without knowing the actual cost it’s hard to say, it just seems high to me as an individual.
These alerts are supposed to be a courtesy. The bank won’t know if you’ll deposit or not, but that doesn’t matter. They could still alert you to the danger in time so that you can deposit. A message a day later saying “Gotcha”, only helps the bank.
$35 per item has no basis in real life costs to the bank. It has no relevance to transaction costs or assuming risks. I understand that there is a cost, but the current method for calculating it is insane.
I just can’t get over how out dated some parts of the financial system are. We have high frequency trading making transactions in milliseconds, but we still have checking account transactions that take days to clear.
It’s ridiculous.
I really don’t think there is any technical reason overdrafts should exist anymore. They shouldn’t even be a coherent concept.
Agreed,
I can write a check out to someone who deposits it at their bank. The bank turns it into an electronic file, presents to the fed, and it clears within a day or two, but some card transactions still take days to come in.
It probably has to do with how many people are getting paid for that single transaction. Merchant Card service fees can be outrageous.
I simply adjust my checking account to always have $2k extra in it. I look at the lowest balance just before my paycheck goes in. If it above $2k, I take the excess cash out and put it into savings, if it is below (happens once in a while), I just plow enough money in to fill the hole. Its VERY rare that I buy something for more than $2k using check or debit card, but in that case I would move extra money from savings before doing the transaction.
Knock on wood, but using that method, I have NEVER had an overdraft in the past 25+ years of having checking accounts.
This sounds reasonable, but isn’t bore out by the real world and disregards the complexity of the human psyche.
I know plenty of people who don’t have the self-discipline to keep their checkbook balanced and overdraft 3-6 times a year.
It causes them much heartache. It is indeed “important” to them.
How can it be important to them if they keep doing it? To blame human psychology or psyche is a cop out, if you want to avoid the fees, balance your checkbook and avoid overdrawing it.
You’d be surprised how many people simply don’t know how to balance a checkbook.
(sigh)
My only criticism of the overdraft policy at most banks is that the banks decide the order in which your charges are applied–if you overdraft $10 over the course of numerous daily transactions (for example $10 on breakfast, $7 on lunch, $8 on dinner, and a late-night impulse-buy from bestBuy.com for $500 on an account that only has $490), the bank will arrange the transctions to maximise their overdraft fees, likely listing the Best Buy purchase first, and collecting overdraft fees on the other transactions that were actually legitimate. This scheme was recently documented in the encore presentation of the frontline episode The Card Game, I reccomend you check it out, especially the part where a lobbyist tries (unsuccessfully, IMHO) to justify this practice.
(my numbers got a little skewed in the above example, the total overdraft would have been $35, not $10)
I remember when I applied for ING Orange checking they made you sign up for some overdraft protection.
Was it required? When I signed up, it was merely an option I could decline.
Some banks make it a requirement, others optional. Once the new rules take effect, it must be optional.
I wonder if this will make ING stop doing hard credit inquiries for the Electric Orange account. That’s the only reason I don’t like like overdraft.
Probably not. Especially if it’s optional. And as a great example, and more specifically to this matter, ING’s Electric Orange’s overdraft protection is already optional.
Think about it… They’re extending a line of credit to you. It’s going to be a hard pull. But again, it’s optional. You don’t have to enroll when you sign up for their checking account.
Whether they do a hard pull for JUST the checking account without the overdraft protection(line of credit), I don’t know. Was that what you were referring to?
ING Electric Orange actually requires the overdraft line of credit, it’s not optional (at least, as of a couple months ago). So they always do a hard credit inquiry.
I agree with the part about doing a hard inquiry for overdraft… though even then, they could wait until you actually make use of the overdraft. I think banks like to do hard inquiries because they also offer mortgages; if they can artificially lower your credit score, they can charge you higher interest on a mortgage.
I too disagree. Just like credit cards, overdraft protection encourages people to not be responsible and learn how to not bounce checks or spend money they don’t have. My take anyway.
I feel like overdraft protection was meant to be simply an insurance backup, much like life insurance, for when the truly unexpected (and definitely unintended) happens.
Although I have both, thankfully I’ve never needed to use either.
I prefer to just have emergency savings. 20 dollars a check adds up quickly and if yo know you screwed up. Well it doesn’t hurt as much if you can use savings to fix the situation.
Is it really asking too much for people to balance a check book? I have no problem with banks penalizing those too lazy to keep track of their own money, but multiple charges in a single day is pretty obscene. There should be a limit on that.
@tbork84
I believe that this is a much better way for banks to make money than to penalize responsible people caught up in exorbitant fees. But it is true that sometimes people make mistakes, and the penalty fees could be a rude awakening.
I don’t have overdraft protection. I have a rewards checking account that pays a great interest rate so I keep nearly all of our emergency funds in that account and that can easily cover slight overspending. If I didn’t have that I would opt in to overdraft protection.
I have overdraft protection $5000 with my Credit Union. I pay it off every month so I have no expense. I transfer all my excess income into the highest interest Money market for the month and then use it to pay off my overdraft before it charges interest every month.
Long story short, over draft protection saved me a few times when my son was born with medical issues and only one parent was able to work. In my opinion it should only be used in a time of need, not as a continous stream of funds you do not have.
In principal, you’re right. People have become lazier about keeping track of their account balance, especially with the rise of debit card usage. This laziness about balancing a checking account or checking a balance by phone or web doesn’t give people an excuse to overdraft their account. Financial institutions “bank” on this human trait. You’d figure that people might learn. Remember that old line “Fool me once, shame on you; Fool me twice, shame on me.”
BUT there is at least one situation where overdrafting is not completely a person’s fault. Sometimes, when you use a debit card, the merchant puts some kind of hold on your card for an amount of money that is greater than than what you spent. I keep reading that this happens at gas stations and hotels where the final balance is unknown. Until this hold is released, you don’t have access to your money and it’s easy to overdraft your account if you run close to the line.
I have only had 2 instances where I have been charged overdraft fees, with one being my fault. The one time I was at fault unknowingly and they charged me three times when I had no clue. There really should be a limit of one fee per day since it really can add up. Luckily the time it wasn’t my fault they took the charge off. The other time they reduced the charges to only one fee with a simple phone call.
@ Lakita: Your bank CHARGES you to move money from your Account A to cover an overdraft in your Account B? Maybe it’s time to move to a credit union. At my CU, that service is free.
A lot of people seem to think overdraft protection is just another form of debt, which of course it is, if you allow overdrafts to happen very often. However, as paystolivegreen points out, mistakes are made…often not on the part of the bank customer. Your account can be overdrawn through no fault of yours — the last thing you need is for a merchant or creditor you thought was getting paid properly to decide you’re a deadbeat.
When PeopleSoft created a huge fiasco after my employer outsourced payroll to that outfit, many workers didn’t get paid at all; others received paychecks that were a fraction of their real salary. I arranged for overdraft protection in the amount of one month’s pay, figuring that at least this would keep my various automatic bill-pays from bouncing. You don’t have to be a deadbeat or a lazy bookkeeper to experience an overdraft.
I agree that if your bank charges you a large overdraft fee (I think a nominal fee would be fair, like a couple dollars) just to shift your own money from account to account, you should go elsewhere.
overdraft protection is a good thing for those who can’t be responsible enough to keep watch on it themselves. some people just need others to do things for them and this will help them…..unless theyre too stubborn to actually opt in
I agree that overdraft protection is my responsibility, but I was just give (at the end of the year) a large financial gift. The bank said they needed to sit on it for a prescribed period of time and gave me a specific date. On the date I assumed the check would have cleared, my account bounced three checks written much earlier. When I called, I was told that the check would be available to post on the day after I’d been told it would be available. Who knew. That felt like a way for the bank to make money and I felt ripped off. They were sitting on twelve grand, but I ended up being charged $105 in overdraft fees. When I complained, they refunded $52, but that was it. I feel had and although this has been my one bank for everything for many years, I’m considering switching over to a credit union.
I don’t see anything wrong with a debit card declining if there is insufficient funds. I can understand someone preferring an overdraft fee vs. a bounced check if they are making an important payment (mortage, whatever) but I think in most cases a small line of credit (like ING Direct checking has) is the fairest thing for banks and consumers. Personally, I would like more options for what to do if I have insufficient funds. Aside from the line of credit (which none of the other accounts I own have), I would like to draw from a separate account, or charge a credit card (especially if I have a card at the same bank, I don’t see any reason why it couldn’t be used as overdraft protection).
In general I like overdraft fees, since it allows the bank to transfer money from people who don’t care about it to people who do (e.g., in the form of credit card rewards).
They say opt in, I’m ready to opt out. If I know where my money goes and whats left in the bank, then I won’t need overdraft protection.
Honestly, I think some of you people are just bored or real type A personalities. I have a real busy life, I can tell you my balance to the nearest $50 probably, but not the nearest $1.
I shouldn’t have to worry about my own bank mugging me.
Resorting to insults is a bit childish don’t you think? You don’t need to know it to the $1 unless you only have $1 left in your account.
I wouldn’t call that an insult, but an observation. Some people do in fact pay more attention to their balance than others, for whatever reason. But does that give them some sort of right to tell others they should do the same or they are a bad person?
Some people really are too busy. The poor especially. Just a week ago, someone I know who is struggling, who trusted the ATM balance, basically just lost their next paycheck due to overdraft fees. (They have 2 jobs, at Fed Ex and with the Census.) That’s huge, and it’s not funny. There are very real reasons why the poor do not trust banks.
Where is the social outrage? Simply put, most people who can do anything about it don’t care. Most reader of this blog just seem so smug that they are oh so clever and it’s not happening to them. The current system is disgusting and anyone who says otherwise is simply naive to the breadth and depth of the unfairness.
As for myself, all I can say is that I’ve never overdrafted as much as when I was in grad school. You figure that one out.
“Some people really are too busy.”
Don’t you expect people who drive a car to pay attention to traffic, or do you let them go where they want to go, at any speed, without signalling, with out learning how to operate a car? I suppose it’s OK if they’re too busy shaving or putting on makeup or texting.
You don’t need to know your exact checking account balance at all times, like when you’re out shopping. The only time I need to know my balance is when I’m at my computer paying a bill online or writing a check for rent; if I’m at my computer, it’s very easy to check my exact balance.
Maybe the problem is that you’re using a debit card. Just use a credit card.
Or, if you’re trying to avoid the trap of running too much up on a credit card, how about a charge card that HAS to be paid off each month?
I use a credit card for my daily expenses, based on a budget I’ve worked out of how much money I should spend from paycheck to paycheck. I keep track of how much I’ve spent by making a note on my cell phone, since it’s pretty much always with me. Budget amount. Amount spent. Amount left to spend.
I have an Excel spreadsheet with my account balances. It gets updated mostly on paydays, which is also when I pay most of my bills. Again: Account Balance. Money allocated towards expenses. Amount left over. It doesn’t matter how long something takes to officially hit my account, because my Excel balance is always accurate.
I really feel it all comes down to personal responsibility. Does that mean the fees the bank charges are “fair”? Perhaps, not. The interest rates on credit card balances aren’t “fair” either. There are on ton of things in life that are set up to take advantage of people who either don’t care enough or aren’t educated enough to protect themselves. Our legal system attempts to rein in the most egregious examples, but for the most part, the childhood axiom that “Life isn’t fair” holds true.
In saying that, probably the most important thing is educating people on how to manage their finances. I spent several weeks in a high school health class planning and budgeting for an imaginary wedding. Could that time have been better spent discussing daily budgeting and learning basic financial skills that could I could apply for the rest of my life? Probably.
..bottom line is a person should not spend more than he has and be responsible.
why pay overdrafts at all? banks have a little known clause known as OPTION IN, or option out as you would have it, making you nearly impervious to check bouncing. sign a piece of paper and your done with overdrafts all-together. and far as being ‘at fault’ with over-the-limit fees in credit cards and such, we should be careful not to adhere ourselves too closely in language they’ve created outlining a completely irresponsible, unethical and predatory process that they’ve created for maximizing profits
I don’t know about your bank, but I know at Old National, even if you opt out, you still will get overdraft fees. The only bank I’ve ever seen it done right at is the Bank of America CashPay cards and ING Direct.
um. the issue isn’t about overdraft coverage for a check; it’s about authorizing overdraft fees to cover a debit charge. So, lets say you fill up at the gas station and you choose to pay with your Chase debit card. The $45.00 debit would not transact if you didn’t have the funds to cover it. This would give you the option to switch cards or pay cash. What the banks want to do is authorize this charge of $45.00, and charge you an overdraft coverage fee of $29.00 and voila, you got your gas without getting a declination of approval.
Who the heck writes checks today anyway? Why is that such a big deal??! I’d rather a debit get declined rather than processed. I get emails anyway.
That reminds me.. I forgot to pay a bill. My fault. Damn.
“Who the heck writes checks today anyway? Why is that such a big deal??!”
Although I write very few checks, I will write one to (for instance) the local handyman who comes by to fix a plumbing problem. He doesn’t have the capability to accept CC or debit card and the check is my proof of payment and dated receipt.
Many instances like this need to be paid by check rather than cash.
The problem was the sneaky way the banks charged overdraft fees and that fact that no banks allowed you to opt out before the law went into effect.