[geofft]

What is the purpose of a fine? Before we discuss further why one shouldn't be fined, can we make sure we agree on why one should?

Off the top of my head, I see "dissuading behavior that negatively impacts the bank", and that doesn't seem to justify a fine in this case, but maybe you're thinking of a rationale for a fine that I and maybe others are not thinking of.

[Touche]

> Off the top of my head, I see "dissuading behavior that negatively impacts the bank", and that doesn't seem to justify a fine in this case, but maybe you're thinking of a rationale for a fine that I and maybe others are not thinking of.

Great! Someone that wants to participate in reason and not just boisterous proclamations. I'm down.

So yeah, I agree with your definition and it applies in this case because the bank is negatively affected by having to shift money from other accounts to cover your overdraw.

[geofft]

So a couple of things:

1. Why can't the bank refuse to process the charge?

2. This seems to be failing, in practice, at dissuading people and making them pay attention to keep a positive balance. At least according to a couple of comments here, there are people who are repeatedly hit by overdraft fees. Is there something better that can be done do solve the actual problem, which is banks having to come up with money to cover these tiny loans?

3. Is there a more proactive way to solve this, such as notifying people (phone, text, push notification, whatever) that their balance is low and they have a recurring charge coming up? Wouldn't that be better for the bank, so that the problem wouldn't happen in the first place?

[Touche]

Oh, you're under the illusion that a for-profit business' primary responsibility is to maximize the value they provide to their customers? Sorry but that's not the way the world works. Now that could possibly be the case if we lived in a country where banks were allowed to compete on things like "treating the customer right" but we don't live in such a country; we live in the one where ever more annoying fees is the only game in town.

But none of this is relevant from your (and my) point of view; ours is really simple. We're completely aware of the murky rules that apply when your account gets close to $0 and the best solution is to not use the account in that case.

[geofft]

No, I believe nothing of the sort and now I'm curious what part of my post conveyed that, so I can write in a less sloppy manner in the future. Sorry!

Judging solely from the point of view of the bank, and conditioned on the assumption that fees are to dissuade customers from behavior that hurts the bank, it's in the bank's interest:

1. To find a way for that behavior not to hurt it in the first place.

2. To actually, successfully dissuade behavior, so that the bank is hurt less.

3. To warn people right when they're about to hurt the bank, so they don't.

That matches the three questions I had.

If fees are themselves for the bank's profit, then yes, sure. But then we can just admit that the bank is charging fees to people who maintain low balances (= "poor people", to first order) for profit purposes, right? That seems clearly within the margin of rhetoric that "tax on poor people" is a fine description.