BBVA Compass is on the Right Track with Overdraft Fees

BBVA Compass is on the Right Track with Overdraft Fees
To help customers avoid fees and more easily manage their finances, BBVA Compass is joining a growing number of large US banks announcing policy changes. Specifically:
  • Eliminate all overdraft fees when a customer’s account is overdrawn by $5 or less
  • Provide new customers the choice to opt-in to overdraft protection at account opening
  • Actively promote its Savings Overdraft Protection service which became available in February 2009.
Such transparency and fee moderation will help US banks regain public trust. If more broadly adopted, they may also stave off regulation working its way through congress. But neither regulation nor policy changes get at the root of the problem. Lost in the debate over overdraft fees is the notion that they are 100% avoidable – by not overdrafting in the first place. It’s unclear what fraction of account overdrafts are unintentional. Some activity may in effect be intentional short term lending. Some well-placed tools to help consumers better manage their finances may actually address the root cause. Since balancing one’s check book ledger against monthly statements appears to be a lost art, what can banks do to help account holders stay ahead of the game? BBVA Compass is on the right track. It recently announced that it will be piloting a program that will provide new electing customers a text message alert when an overdraft occurs on their account. The new program is expected to begin shortly in four test markets. BBVA Compass expects to roll-out the service to its remaining markets across its seven-state footprint by the end of the first quarter 2010. Mobile banking customers won’t be able to say they weren’t well informed. Customers can create alerts to receive text messages when account balances dip below preset balances. They may also text their bank for real-time account balances prior to making a debit card purchase. And, should an overdraft occur, they’ll know about it immediately and be able to take action to prevent its reoccurrence. Will moves like this persuade congress to retreat from the legislation proposed by Senator Dodd (D-Connecticut) earlier this month? Not likely. Further demonizing banks is too attractive for a congress battling historically low approval ratings. US retail banks will have to learn to do more with less – by fiat.
Bob Meara About Bob Meara

Bob Meara is a senior analyst with Celent's banking practice and is based in Atlanta, Georgia. His research focuses on the branch and ATM delivery channels, customer analytics and check and cash payment processing technologies. A well known authority on remote deposit capture, Bob has led multiple consulting engagements including proprietary research projects involving financial services hardware, software and the impact of self-service on branch banking.

Before joining Celent, Bob was the director of product marketing at Alogent. In this role, he positioned and launched a series of Check 21 payments solutions.

Prior to Alogent, Bob also held positions in marketing and brand management at BellSouth, Hayes Corporation, and Procter & Gamble in addition to being a commissioned naval officer.

Bob earned a Bachelor of Science in Applied Physics and Electrical Engineering from Case Western Reserve University.


  1. Another important safety feature that would be valuable for consumers is to simply be able to specify that debit card transactions cannot overdrawn — period. The bank knows if the funds are available. It should be the consumer’s right to risk the theoretical “embarrassment” of having a transaction declined over the potential for overdraft fees.

  2. Overdrafted says:

    I agree with David, why should a client have to pay $$38 for a $0.38 overdraft? If I would have known I that I would have to pay a 10,000% interest FOR A 5 DAY $0.38 LOAN…. The payment should have never went through in the first place if there were not enough funds.

  3. BBVA talks alot, but this is what they really do. February 3:

    Received a call from Amanda in Client Services at BBVA Compass [205-297-3000]: I asked her why she was not responding to me via email, per my request, she informed me that she had never seen my emails referencing that and that she didn’t have email access. That all she had was my number. I asked her specifically if the call was being recorded because I have no intention of discussing this further. She said, “Yes.”

    I conveyed what is reflected in my emails: that my debits had been stacked out of order triggering the system to assess huge fees for overdrafts of pennies. She said this had always been their method. She also told me that they were NOT RESPONSIBLE FOR THE INFORMATION ON THE PHONE SYSTEM OR THE ONLINE SYSTEM; that customers could not use that as a reference point for the activity on their accounts. What should customers use to get that information? I told her that the “method” was dubious and that regulatory agencies and my Congressmen would be contacted.

    I also conveyed that the “Customer Service” rep had been beyond incompetent in misrepresenting herself as the “boss” and that it was not appreciated. She told me that they had always done business this way so I said that, in that case, Compass Bank had far better Customer Service than BBVA Compass.

    She refused to adjust my account so I told her that one the numbers settle out that I would be moving my account: that none of this was acceptable.

  4. Woodberg says:

    Opting out of overdraft protection doesn’t do anything. At Compass bank, even though I have opted out of overdraft protection, they will still approve debit transactions which overdraw my account. They just don’t charge service fees. Unfortunately, in a fraud case, which is what I’m dealing with now, Compass, freely approved more money than was in my account even though I opted out. I guess I just don’t understand the point of it.

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