Founded in 1858, First Hawaiian Bank is not only the oldest bank in Hawaii, but it is also the largest with 58 branches throughout the Hawaiian islands, and additional branches located in Guam and Saipan.

With the vast majority of Hawaiians banking at First Hawaiian Bank, it is important for members of the financial institution to understand First Hawaiian Bank overdraft practices and related fees and to see how the bank stands up to the competition.

What is Overdraft Protection?

When you do not have enough in your checking account to pay for the funds needed for a debit card transaction or for withdrawing money from the ATM, your bank or financial institution may agree to cover the transaction for you so that your purchase or withdrawal is not denied. Essentially, the bank issues you a very short term loan for the money that it pays on your behalf and terms it overdraft protection.

In exchange for their mini-loan to you, banks will charge a fee for their overdraft protection services of paying the transaction or covering the withdrawal on your behalf. The fee for the service varies across the United States from financial institution  to financial institution and ranges anywhere typically from $10-$35 per transaction, with the average fees being $28.

Prior to recent legislation enacted within the last couple of years, some banks automatically enrolled customers into these overdraft protection programs without their express consent. Customers were surprised to find fees listed on their financial statements that disclosed they were being charged an overdraft fee.

Now, banks and credit unions must have customers affirmatively opt into overdraft protection programs before they can charge any overdraft fees related to debit card or ATM transactions. Failing to do so is illegal.

First Hawaiian Bank Overdraft Practices

First Hawaiian Bank overdraft practices are comprised of several different plans to addressed overdraft needs. The website states that on all of its accounts, it has standard overdraft protection. This overdraft protection works when customers have automatic bill payments or if they have checks or other transactions using the checking account number that would have caused the checking account to go into the negative.

In addition to the standard overdraft protection, First Hawaiian Bank offers a program called DebitPlus. If customers decide to enroll in the DebitPlus program, they can have their debit card transactions and ATM transactions paid.

First Hawaiian Bank overdraft practices in the DebitPlus program cause customers to incur a $30 overdraft fee for each transaction related to debit card or ATM use. The same $30 fee is also assessed when they pay an overdraft or an item is returned due to non-sufficient funds.

First Hawaiian Bank also has a practice in place known as Continuing Overdraft Notification that states if the account is overdrawn for seven calendar days, a notification will be mailed to the customer and a one-time fee in the amount of $10 will be assessed.

Additionally, First Hawaiian Bank overdraft practices encompass a daily fee limit which states that customers will be charged only a maximum of five times per day for overdraft or returned item fees even if more than five transactions processed while the account balance was in the negative.

As a courtesy, First Hawaiian Bank also offers a service known as Small-Cap Overdraft Waiver. If a customer overdraws his or her account by a total of five dollars or less, the overdraft fee of $30 is waived and the customer will not be required to pay.

Lawsuits over Inappropriate Overdraft Practices

Some banks and credit unions have been accused of engaging in inappropriate overdraft practices. These financial institutions were said to have changed the order of processing of the transactions in order to increase the number of overdraft fees assessed to the customer and thereby to increase their profits.

These financial institutions would allegedly reorder transactions so that the largest transaction was processed first, so that a customer overdrafted sooner than if the transactions were processed in chronological order.

If you believe you have been charged inappropriately for First Hawaiian Bank overdraft practices or for overdraft practices at other financial institutions, you may be able to seek legal compensation. An experienced overdraft fee attorney can review your case at no charge and can help you understand the legal options that are available to you.

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