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U.S. Appeals Court Rules Banks Can Post Checks In Manner That Maximizes Overdraft Fees

Thursday, December 27, 2012 - 11:09 AM
U.S. Ninth Circuit Court of Appeals rules in a case against Wells Fargo that banks can post checks and debit card transactions in a manner that maximizes overdraft fees. The court says federal law preempts a California law that was aimed at stopping this practice. The court said federal law "delegates to banks the methods of calculating fees."

Wells Fargo was resorting checks to post the most expensive ones first in an effort to maximize how many checks were bounced and maximize overdraft fees accordingly. 

Appeals court backs Wells Fargo on method of assessing fees -

While this story doesn't say, I believe I have read in the past that Wells Fargo also posts all debits before posting any credits to an account, that is posts all withdrawals before posting any deposits, and thus maximizing overdrafts.
me1004me1004373 posts since
Jan 16, 2010
Rep Points: 2,600
1. Friday, December 28, 2012 - 9:51 AM
Just ridicolous.  If anything, they should only be able to post in the order things are received, deposit or withdrawal.

I will say that years ago I was able to get a branch manager to reverse a bunch of overdraft fees. I was a starving student and the overdraft occured because a check I deposited through the ATM went missing.

The madness will stop some day.  But I suspect there will be a rude awakening the next morning.


cd : O )
ChrisCDChrisCD70 posts since
Nov 18, 2010
Rep Points: 457
2. Friday, December 28, 2012 - 10:52 AM
Just FYI, the California law that was just overturned by the Ninth Circuit did specify that the transactions must be posted in the order they were done, rather than rearranged to make for the maximum number of overdraft fees. 
me1004me1004373 posts since
Jan 16, 2010
Rep Points: 2,600
3. Saturday, December 29, 2012 - 6:46 AM
After a phone call to a CSR at WF, I was assured that night time processing started with credits then debits. This was about 3 weeks ago though.
klinkklink101 posts since
Dec 8, 2012
Rep Points: 276