Chase denies hacking in vanishing balances

Chase Bank experienced technical difficulties for over an hour Monday night, worrying customers who logged into their accounts and saw their balance at $0 or were unable to get any access to them at all.

A spokesman for the bank said it was strictly an internal technical issue and customers' accounts were not in danger.

"The problems are an issue with the checking account portion of chase.com, nothing to do with mortgage or credit banking. We have a technology problem regarding customers balance information that we are working to resolve," the spokesman to CBS News. "It has nothing to do with cyber threats or hacks. It is an internal issue. We are very sorry to our customers for the inconvenience."

Within two hours, the bank tweeted that the issue was resolved. Customers reported seeing their balances once again.

Still, hundreds of Chase users expressed their frustration on Twitter and Facebook. Many reported seeing their account balances listed as "$0" on mobile devices, while others said they got a "System Unavail" message when logged into the bank's website on their computers. Read more >>

Wal-Mart, Amex to Offer Alternative to Debit, Credit Cards

The two companies said Monday that Bluebird, which began during a pilot program late last year, will have no minimum balance and no monthly, annual, or overdraft fees. They said that the only fees that will be associated with the card will be transparent and within the user's control, such as out of network ATM withdrawals by consumers that don't have direct deposit.

Wal-Mart Stores and American Express view the card as an alternative to debit and checking accounts, which will help consumers better manage and control their finances. The companies say Bluebird was built on feedback from consumers, who said they were bothered by the rising fees related to checking accounts and debit services.

"Our customers tell us that they're tired of navigating a complex maze of do's and don'ts to avoid the ever growing list of fees found on checking products," Daniel Eckert, vice president of financial services for Walmart U.S., said in a statement. Read more >>

$31.5 billion in overdraft fees by banks in the past year

The financial crisis was supposed to spur a new era of frugality and fiscal responsibility. It doesn't exactly appear to be working out that way. Americans are once again increasingly overspending what they have in their checking accounts. In all, consumers were hit with $31.5 billion in so-called overdraft fees by banks in the past year, according to a new study from bank research firm Moebs Services. That compares to $30.8 billion in the same period a year before.

That was below the peek of $36.8 billion in the same period in 2008. But this year is still the first time overdraft fees have risen since the financial crisis. From mid-2008 to mid-2011, the number of times consumers were hit by overdraft fees had fallen by roughly a third. Now in the past nine months, the levying of overdraft penalties appears to be on the rise again, up 10% in the past nine months.

The question is whether this a a result of shady bank practices or poor money management. On the margin, it appears that overdraft fees have gotten a little more fair. Banks have shelled out hundreds of millions to settle claims that they re-ordered consumer purchases in order to trigger overdraft penalties as often as possible. And the Card Act made it illegal for banks to automatically enroll customers in overdraft protection, limiting the number of people who get hit with fees they didn't even know about. Read more >>

ATM fees hit record high, free checking declines

Banks are hiking ATM fees to record levels and cutting back on free checking accounts, according to an industry report issued Monday. The financial research firm Bankrate,com said ATM surcharges -- the fee charged when you use a machine that's isn't your bank's -- rose for the eighth straight year, up 4%, to a record high of $2.50.

In addition, the fee your bank charges to use another bank's ATM rose 11% to $1.57. So for many customers, using an ATM from a competing bank costs $4.07, an increase of 7% and a record.

Banks traditionally provide ATMs for free to their own customers, and cover their costs by charging consumers who use out of network machines, according to Greg McBride, senior financial analyst for Bankrate.com. But people are getting smarter about using only in-network ATMs, which means that the companies are trying to make up for that lost revenue. Read more >>

Bank fees rise for checking, ATMs; fewer credit unions offer free accounts

Checking and ATM fees are rising at the nation's banks, and fewer credit unions are offering free accounts, two new studies show. MoneyRates.com's semi-annual bank fees survey found that, by nearly every measure, the fee environment for consumers has worsened since the end of 2011.

The average minimum checking-account balance needed to avoid a monthly service fee jumped by $856, to $4,447. Overdraft fees jumped to an average of $29.83, up from $29.23, said the data provider about bank rates, personal finance and savings accounts. Among banks that charge a monthly fee, the average cost was $12.08, up from $11.28. ATM fees also rose.

"This is the most comprehensive rising fee trend we've seen in one of our checking account surveys," Richard Barrington, MoneyRates.com senior financial analyst, said in a statement. Typically, credit unions have been a haven for fee-sensitive consumers, but the ranks of those offering free checking is shrinking, according to a Bankrate.com study, also released Monday.

Seventy-two percent of the nation's 50 biggest credit unions offer free checking accounts with no minimum balance required, down from 76 percent last year, Bankrate.com said. Read more>>

Banks Robbed Customers of Nearly $30 Billion in Overdraft Fees Last Year

Americans incurred $29.5 billion dollars in overdraft fees at the nation’s 12 largest banks and credit unions in 2011. That’s nearly $100 for every U.S. citizen, charged for overdrafting a checking account.

Overdraft fees, for those lucky enough to have never encountered them, occur when a bank withdrawal leaves a customer’s account below a pre-determined level. For some accounts, customers can draw the funds all the way down to zero and only incur a fee when the balance goes negative. Other accounts come with minimum balance requirements, forcing customers to keep at least, say, $500 or $1000 in the checking account at all times.

99% of the 237 unique checking accounts studied charged an overdraft fee of some kind, with the median penalty fee costing a customer $35. You might not know that, though. As the Pew study points out, the median length of a checking account disclosure statement – the fine print that most customers gloss over en route to opening their account – is a whopping 69 pages. That length is down from the 111-page average in 2010, but it’s still not exactly light reading. Take this Bank of America disclosure, for example; at 37,000+ words, it’s about 8,000 words longer than Steinbeck’s Of Mice And Men. Read more >>

One in Five U.S. Households Have a Negative Net Worth

About one in five U.S. households owe more on credit cards, medical bills, student loans and other debts that aren't backed by collateral — so not including car loans — than they have in savings, checking accounts and other liquid assets, according to a new University of Michigan report.

"Some families have not been able to make substantial headway," said Frank Stafford, an economist at the U-M Institute for Social Research and co-author of the report, in a statement.

Average savings levels have gone up since 2008. But the U-M research showed that there had been no improvement in financial liquidity between 2009 and 2011 — except among families with more than $50,000 in savings and other liquid assets. Families who could afford to save more money often did so because they feared the worst. More...

New Bank Fees Push Thousands Into Credit Unions

Image via WikipediaLast Friday, after Bank of America's (BAC) announcement of new fees on debit cards, retired postal worker Victoria Lee took her adult daughters to her local USPS Credit Union. "[My daughters opened] free checking accounts with no charges for the use of debit cards," Lee said. Like many Americans who are carefully watching every dollar, the Florida resident said she was grateful to have an alternative to retail Wall Street banks.

Meanwhile, a record-breaking 3,200 new checking accounts were opened over the weekend at the Navy Federal Credit Union, the world's largest credit union with 3.7 million members and nearly $48 billion in assets. The weekend surge -- which crushed the previous high of 2,500 -- fits into a larger trend for the credit union, which serves the Department of Defense and active duty military. It has had annual growth between 6.3% and 6.7% since 2007, and is on track to record a 14% uptick in membership this year, said Tisa Head, the senior vice president of savings products. In addition to its fee-free debit cards and accounts, another driver for the year's projected double-digit membership increase has been the credit union's willingness to post pay early for active duty members who use the Active Duty Checking account. More...

Bank of America hikes fee on checking accounts

Image via WikipediaIt's getting more expensive to have a checking account. The monthly fee on Bank of America's basic MyAccess checking account rose this week to $12, from the previous $8.95. And more changes are in store for customers of the country's largest bank.

Customers with the MyAccess account can still avoid the monthly fee by setting up a monthly direct deposit of at least $250 or maintaining a balance of $1,500. The bank says customers were notified of the fee hike earlier this year. Another option that skirts the fee increase is the ebanking account, which requires customers to do their banking online and opt for electronic statements. More...

Big banks hit customers with higher fees, and more of them

Image by Johnny Vulkan via FlickrThe nation's biggest banks are increasing many of their fees, adding new ones, eliminating debit card rewards programs and making it harder for customers to avoid paying monthly charges for checking accounts.

On May 24, Bank of America will raise the monthly fee on its most popular checking account from $8.95 to $12. On June 27, it will start charging customers a $35 fee if they overdraw their account by less than $10. And next year, the bank plans to replace its basic checking account with a new "essentials" account that comes with a monthly fee that cannot be avoided.

At Chase Bank, fees have increased for overdraft transfers, outgoing wire transfers and stopped payments. New customers that sign up for a basic checking account face a $12 monthly charge, up from $6. More...

Broke and Desperate, Now Banks and the FDIC Want the Money Under Your Mattress

Image via Wikipedia

USA today reports more than one in four American households, including more than half of black households, use check cashers, payday lenders or pawnbrokers rather than a bank, according to a FDIC report. That's roughly 30 million households that have no bank account, or have one and use a check cashing service; about 9 million households have no bank account at all, according to the FDIC study which was conducted by the Census Bureau.

USA Today writer Martha Moore describes this as a "problem", a problem says Moore that's "most acute among minorities: 53% of African-American households and 43% of Hispanic households.

Now the FDIC claims they want banks to "win back those customers, saying consumers should have the benefit of insured savings and be able to build a credit history. Translation -- they need the money.

"There's a substantial segment of American households whose financial services needs aren't being adequately met," Martin Gruenberg, FDIC vice chairman, said in an interview Tuesday. He called the disproportion of minority households in the group "dramatic and troubling."

What's dramatic and troubling is that not only are banks broke, but so is the FDIC, and now they're after money from the poorest segment of the population.

USA Today:

The FDIC will use the data in its effort to persuade more banks to offer starter accounts," low-cost, no-minimum checking accounts without automatic overdraft programs that can result in customers getting hit with fees if they go in the red. One option, Gruenberg said, is to offer incentives to banks through the Community Reinvestment Act, which encourages banks to do business in low- and moderate-income communities."