March 16, 2011
For the past 20 years, it has been my privilege to represent bankers and the banking industry as a lobbyist. One of the cardinal rules for any lobbyist is to advocate for the interests of the represented group, in my case bankers. Lobbyists are often placed in situations in which they must make immediate decisions, without benefit of consent from their governing bodies or volunteer leadership. Seasoned lobbyists are well-versed in the issues at hand and can make the right decisions with confidence.
Frequently, however, I have been baffled by positions espoused by “consumer groups.” Many times lobbyists who purport to represent the interests of consumers appear to be doing consumers a disservice. I often wonder where they get their marching orders. Who decides what is best for all consumers?
A perfect example is the maligning of overdraft protection programs offered by banks. Banks have been providing this service to their customers for years, and every banker I have spoken with has letters and e-mails from customers, thanking them for offering the peace of mind these programs bring. I do not recall having a conversation with any banker who has received a single complaint from a customer about overdraft protection.
These programs—which many customers use frequently, but most never use at all—pay for a “bad” check and charge the customer a fee for the service. Customers who do not want the service can easily avoid it by not writing bad checks!
Prior to these programs, the bank would send the bad check back to the merchant who had originally accepted it. The bank would then charge a fee to the customer, and the merchant generally charged an even larger fee to the customer. If the customer did not make the bad check good, the merchant could have the customer arrested for theft by deception, with the customer winding up in jail.
This nightmare scenario ended with the advent of the overdraft protection programs. I have to question how consumer groups decided that overdraft protection programs were bad for consumers. Isn’t it evident that the alternative—being charged two very high fees and possibly jailed—is worse?
– S. Joe DeHaven