Consumer complaint received 2022-04-09
Company: U.S. BANCORP
State: NM
Product: Checking or savings account
Sub-product: Checking account
Issue: Problem caused by your funds being low
Sub-issue: Bounced checks or returned payments

Complaint:
I have, for various reasons, been in a position where I needed to overdraft my checking account. This has usually resulted from the use of multiple ATM cash withdrawals in amounts ranging from anywhere between {$40.00} - {$300.00}. US Bank has consistently allowed me to overdraft a total sum of more than {$1500.00} before my direct deposit retirement checks arrive to bring my account back into a positive balance. US Bank has consistently provided this overdraft protection of more than {$1500.00} for ATM withdrawals and debit card transactions and collected {$39.00} overdraft fees for each ATM or debit card transaction that results in, or adds to, an overdraft. 

On XX/XX/2022, I wrote a check fo pay my rent that would have resulted in an overdraft well below the {$1500.00} limit that appeared to have been established for my account, but US Bank returned the check unpaid. This action is likely to result in the loss of my home and other legal entanglements. 

I questioned the bank about their actions and was told that there was a different policy regarding overdrafts from paper checks as opposed to overdrafts caused by ATM withdrawals and debit card transactions even though all of these transactions are linked to a single checking account. I asked the bank to provide clear statements of company policy regarding these distinctions but they could not point to any written policy/procedure statement that a typical customer could rely upon to comprehend what seems to be a capricious and unreasonable distinction between the handling of overdraft protection based on transaction method ( check, ATM, ACH, etc ). Indeed, the main difference among these various methods for withdrawing funds seems to be strictly related to the amount of fee income the bank is able to generate from an unsuspecting customer. 

I have paid out hundreds, if not thousands, of dollars in overdraft fees to US Bank on ATM and ACH transactions. The bank seemed to have no problem with me paying $ XXXX in overdraft fees for multiple items but suddenly balks at providing overdraft protection when the financial instrument is a single check? It appears that the bank is intentionally trying to maximize its fee income by incentivizing multiple transactions of a certain type that result in overdrafts and. at the same time, maintaining the position that these overdraft protections only apply when using an ATM or debit card but not when the consumer opts to write a check. I doubt if most consumers have been told, and even fewer may understand, the banks rationalefor this distinction. 

The whole setup seems very reminiscent of the process XXXX XXXX XXXX utilized several years ago to decide the order in which checks were processed. XXXX XXXX XXXX was accused in a class action lawsuit of trying to maximize fee income by paying out large checks first so they could collect more overdraft fee income from a group of smaller check amounts that would be paid as overdrafts. I was one of the primary class action litigants in that case against XXXX which eventually settled by paying out millions in restitution to its customers for its bad actions. 

US Bank needs to establish a clear, concise, and user friendly policy and procedure for its application of overdraft protection, and should, as many other national banks have already done, reduce the large fees and the number of fees that their bank can collect from the average consumer.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation