Bankrate has an extensive article on "courtesy overdraft" services tied to debit cards. These services prevent your debit card transactions from being denied, but have the unpleasant effect of charging you anywhere from $20-$35 for this "courtesy."

From Bankrate:
Common sense would dictate that if you're trying to take out more money than is in your account, the ATM or point-of-sale authorization system should either refuse the withdrawal, just as it would with a credit card, or let you know that you'll be overdrawn and you'll incur a fee; but that's not what's happening.

What's also troubling is that most bank customers are automatically enrolled in courtesy overdraft programs without their knowledge. Banks aren't required to send a notice to the customer that they're enrolled in the program unless the bank chooses to promote the program, and most don't. Consumer advocates say these programs are nothing more than high-interest, short-term loans foisted upon unsuspecting customers. Bankrate says that you should be able to opt-out of courtesy overdraft programs by simply calling your bank and asking. If they say it's not possible, you should escalate your complaint to someone higher on the food chain.

Have you opted-out of your overdraft program? Why? Why not?

Foreclosure tracking firm RealtyTrac has announced November's foreclosure numbers and, while foreclosure activity is down 10% from last month's number, the news isn't happy. Foreclosures are up 68% from November 2006, with 201,950 foreclosure filings—up from 120,334 this time last year. Also worth mentioning, last year's numbers weren't exactly low—they were up 68% from 2005.

The foreclosure filing numbers include notices of default, pending lawsuits, auctions, and back repurchases or REOs. An increase in REOs is a troubling statistic because it means that banks are unable to sell properties at auction, and are being forced to keep them.

Here are some of the numbers for the month of November:

Notices of Default: 35,096
Auctions: 71,965
Bank Repurchases: 46,438

When comparing this year's numbers to 2006, one can see that the increase in foreclosure numbers comes mainly from auctions and repurchases. There were only 4,069 more notices of default served this November, but 81,616 more filings in all.

The Fed has unanimously approved a new plan to tighten provisions designed to prevent predatory mortgage lending, as well as help to decrease the number of consumers who irresponsibly take on debt that they cannot afford to repay.

The proposed changes would (among other things) prohibit lenders from issuing loans without taking into consideration the borrower's ability to repay the debt from sources other than the home's value, severely limit prepayment penalties on loans that are subject to rate increases, prohibit creditors and brokers from coercing appraisers, and stop lenders from using the term "fixed" to describe non-fixed loans.

The proposal is open for a period of public comment before the changes take effect next year. You can Consumers with banking complaints reflexively complain to the FDIC or their state Attorney General, even though five federal agencies regulate the banking industry. A bill introduced by Carolyn Maloney (D-NY) wants to connect aggrieved consumers to the right agency by establishing a hotline to handle all banking complaints.

Maloney, who introduced the legislation to create the hotline, noted that the federal agencies have Web sites and numbers for consumers to call with questions. But a single hotline will help rout calls to each agency "more expeditiously and encourage frustrated consumers to call and get answers to their questions," she said.

Further, the hotline could raise the agencies' profiles among consumers and help keep track of consumer complaints, she said. The bill would also create an informational Web site.The Federal Reserve Board claims that they get along just fine with the other agencies and are actively working to serve consumers. As evidence of their consumer-friendly nature, they cite "the use of technology such as encrypted email and electronic scanning of complaints to speed up and improve the referral process." The Office of the Currency Comptroller, one of the agencies the Fed claims to be working with, disagrees. The OCC's Chief of Staff thinks the bill is a great idea that would eliminate "the frustration consumers experience when being referred to another agency."

We love government hotlines. In New York, 311—the single point of contact for all city agencies—has already proven more useful than several outer-borough subway lines. When we're angry, we don't want to painstakingly research agency portfolios. We want to pick up the phone and grouse to someone who can solve