It is not only payday loan lenders who are changing fee policies. many lenders change their rates as regulations change but there are some who are changing their fees to enhance their best practices with borrowers. JPMorgan Chase bank has also changed their overdraft fee policy.
On July 22, 2012, Chase bank implemented a new rule for their overdraft fee program. In the past, if your bank account was already under zero, and you stopped for a coffee, your account would be charged an overdraft fee. From now on, when a customer has a charge for $5 or under, there will no longer be an overdraft fee attached to the transaction. This new rule will help prevent multiple charges from being attached to the account when small purchases are made. This new ruling is added to a 2010 policy that no overdraft charges would be processed if the end of day balance fell less than $5 below at the close of business.
While Chase is promoting their new policies, there is little to no mention as to why changes were made. Settlement negotiations from a class-action lawsuit drove the bank to make some changes to their policies. The lawsuit was not directed at Chase bank only, there were other big banks involved. The lawsuit was directed at the banks' unfair overdraft policies. Many banks have practiced ordering debits from greatest to least which will bring more overdraft fees. The proper way to sort out the transactions at the end of the day is to do FIFO, first in first out.
In February, Chase bank agreed to settle the lawsuit for $110 million. The new policy which Chase has not implemented will be a requirement for two years. Final approval for this settlement will occur by the end of the year. A boost for the best practices for Chase is that the bank proposed these changes without any prompting during settlement talks. Many consumers will benefit from this new change. A $4 cup of coffee will no longer cost $38. As long as the purchase is under $5, there will be no fee, even if there are multiple charges for that small amount.
There is much to be said about a company when changes for the consumer's behalf are made. Credible pay loan lenders promote responsible lending and borrowing. Many states have capped fees allotted for loans, and process their loans with some of the lowest fees in the industry. Just because a charge is allowed, does not mean all lenders will charge it.There are also qualification standards which need to be met in order for a loan to be approved. Many companies will loan with lesser standards, but credible payday lenders want a customer to be responsible for their loan. The drive behind these policies is twofold. Of course, the business is only successful when money is returned, but the company also knows how a customer's financial situation can worsen when loans are unpaid and high interest rates accrue. Responsible lenders will lead the pack as customers become more aware of those companies with the best practices in place. Be a responsible borrower and find a company who works with best practices when it comes to your hard earned money.