What a privilege! Below is an email I received from the credit union of which I am a member:

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Dear Member:

Recently we mailed you a letter regarding the Overdraft Privilege service (ODP) you’ve been taking advantage of on your checking account. We’d like to take this opportunity to remind you about returning the OPT-IN form that was enclosed via mail or by completing it online using e-Banking. A summary of the letter and the new federal regulation is provided below.

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As a result of a new Federal Regulation taking effect in the summer

of 2010, financial institutions are now required to have an

OPT IN request from members for Debit Card purchases/POS

activity, which are subject to discretionary Overdraft Services.

HOW DOES THIS AFFECT YOU?

Minimally. By signing and returning the OPT IN form, your transactions will continue to be covered without interruption by ODP when applicable. However, should we not receive the form, Debit Card (POS) transactions currently covered by the ODP limit will be declined as of August 2010.

Below is an example of your ODP benefits:

On a late night grocery run, you do not have enough funds in your checking account to cover your total bill. However, you need to purchase your items.  Using your Debit Card, the Point of Sale is covered and approved up to your available ODP limit including the fee.

Without an OPT IN form on record, the same scenario would end with the transaction being declined

. We will not authorize or pay POS overdrafts after August 2010 unless you have provided us with the OPT IN form and your membership is in good standing. Another more detailed example is provided at www.fmfcu.org/odp.

IT’S EASY TO OPT-IN

The best way to ensure the limit continues to be available for Debit Card transactions, is tocomplete the form as soon as possible to avoid a disruption of your ODP service.

• • ONLINE (preferred method): If you would like to opt in online, please log into e-Banking at www.fmfcu.org and click on Forms and Applications, and then Electronic Services.
  • BY MAIL: To print the form and mail it, download it here. Mail it to: Franklin Mint Federal Credit Union, Attn: Support Services, P.O. Box 1907, Media, PA 19063.

For more information, including additional overdraft options such as a personal line of credit, visit www.fmfcu.org/odp.

Sincerely,

Cindy Wanamaker

Chief Operating Officer/SVP

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First let me say that I think FMFCU is a rather good credit union. They are very friendly in their branches and have never given me trouble over the years.  What you see here, however, is the reason I am generally displeased with most banks and credit unions at large.

Reread that scenario FMFCU presented as a reason to opt-in to their “Overdraft Privilege.”  They very specifically do not detail what would have happened if you did indeed have ODP enabled on your account.  Your “late night groceries” which are likely some eggs and milk, or perhaps some snacks for a movie, very likely is in the range of $20.  Thanks to the ODP that FMFCU so graciously provides you the privilege of adding to your account, your chips and dip suddenly raise in price by a factor of 2.5x.  After the fee that is levied against your account, you are now spending a full $53 for whatever it is you needed for your late night grocery run.

This email, for all it’s eloquence and wordsmithing, is hawking a “service” that even used car salesmen would not dare promote.  What do you call a person that convinces you to set up a system that makes it easy to accidentally transfer money from your bank account to theirs?  Not a banker, that’s for sure.

No thanks, FMFCU.  I do not want the privilege of accidentally giving you $33 from time to time.

Lets not approach the results of what happens if I don’t repay that $33 within 24hrs.  For the further privilege of allowing my account to be in the red, I may pay $33 per day! What joy!