When customers open checking accounts, banks like MB Financial provide debit cards for the withdrawal of cash from ATM machines and the purchase of goods and services.

Many bank customers are not aware, however, that as part of the process of obtaining the debit card, banks automatically enroll their customers in “overdraft protection.”

The overdraft protection kicks in if the customer spends more than he or she has in the account to cover the purchase, up to a limit of a few hundred dollars. These overdraft fees can add up quickly for an individual bank customer.

The median overdraft fee was $30 nationwide for both banks and credit unions last year, according to Moebs Services, an economic research firm in Illinois. That was up from $29 in 2012 and $26 in 2009.

When consumers make a number of debit card purchases or ATM withdrawals in a single day that exceed their checking account balance, they can incur multiple overdraft fees that same day. Some banks increase the overdraft fees people incur in a single day by reordering their transactions, according to a report released in 2014 by Pew Charitable Trusts, a nonprofit public-policy organization.

The Overdraft Landscape

For consumers and banks, the landscape for overdraft protection changed in 2010, when Federal overdraft fees laws went into effect.

These overdraft fee laws prohibit banks from charging for overdrafts when consumers use their debit card to go shopping or make withdrawals from an ATM, unless consumers choose to opt in for so-called overdraft protection.

Many large banks have been marketing this service to consumers as a “courtesy” over the past few years, touting the benefits of avoiding having a transaction declined because there aren’t sufficient funds in their checking account.

Of course, in exchange for opting in to overdraft protection, consumers will incur overdraft fees when they overdraw.

Some consumer groups say many bank customers don’t understand the overdraft protection coverage form they are given to sign when they open a new bank account.

According to the Pew survey, some 52% of people who overdrew with their account and were charged an overdraft fee in 2013 didn’t recall opting into overdraft protection.

Reviewing MB Financial Overdraft Protection

MB Financial Bank is a branch bank founded in 1933 and headquartered in Chicago, IL. It operates 89 branches in three states.

According to the bank’s website, MB Financial offers three overdraft protection services, marketing these options as a “backup plan in place should emergencies happen.”

The first option is for a customer to link their MB Financial checking account to an MB Financial savings account.  Once the customer sets up the link, MB Financial will automatically move money from the savings account to the checking account when needed to avoid overdraft fees.

However, while there is no fee to link the accounts, there is a $10 fee per automated transfer.

Another option MB Financial offers is called Guard My Card, which is connected to the customer’s debit card to provide access to an additional $500 (at the bank’s discretion, of course).

There is no extra cost to enroll in Guard My Card, but for each overdraft item the customer incurs an overdraft fee of $37, up to a limit of five interactions per day.

If the account is overdrawn for two or more consecutive business days, MB Financial charges an additional $6.50 per day, for up to 16 calendar days. That fee begins on the second business day.

The third overdraft protection plan offered by MB Financial is known as the ReserveLink™ line of credit, an unsecured line of credit tied to a MB Financial checking account that “can be used as backup funds for unexpected expenses.”

Essentially, this service provides a loan where credit approval is required, and current interest rates are charged.  There is also a one-time processing fee of $50 and while the customer will not be charged overdraft fees, they are charged interest on the amount they borrow.

Have You Incurred Excessive Overdraft Fees?

There are no overdraft fee laws to regulate the amount of money charged for overdraft fees. Even if a customer’s balance falls below by one dollar, a bank can charge $35 for the overdraft fee. And many customers across the country are finding themselves hit with excessive bank overdraft fees.

Sometimes, banks like MB Financial may misrepresent the rules about overdraft protection to customers in an effort to collect on overdraft fees.

Some banks have even been accused of routinely misrepresenting customers’ account balances as well as reordering debits and credits to accounts to assess more overdraft fees.

If you have been the victim of excessive bank overdraft fees, contact an experienced consumer rights attorney for a free case evaluation.

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