Wednesday, January 8, 2014


Some months ago I received a telephone call from my "personal banker" at the local branch of my bank.  Now my balance is unworthy of a personal banker, so I was amused at the prospect of a personal banker actually helping me with investments.  But he did do one useful thing for me, which was to help me sign up for online access to my bank account.  I check in every few days to see what's going on with our account--how much J spent at the grocery store, whether checks have cleared, whether J's automatic deposits have been received and so on.  I can also check our monthly spending, but that's pretty worthless, as it all depends on when checks clear.  My landlord deposited the rent check before the first, so it shows up in December spending, rather than January.

My "personal banker" also suggested that I check out "auto-pay", which would allow me to pay bills without having to write a check.  This sounded like fun, so I investigated it.  And was disappointed.  In most cases, my creditors allow only the auto-pay that allows them to pull money from my account, rather than the auto-pay that allows me to push money to them. Now I don't give strangers access to my bank account.  I don't even give friends and family access to my bank account.  So giving someone the right to pull money from my account was not going to happen.

And I was disappointed to find that, in most cases, a push auto-pay just meant that the bank wrote a check and sent it off the the creditor.  Gee, I can do that myself, and have been since 1972.  Worse, as I discovered by reading up on the Internet, the money is taken from my account when the check is written, not when it is cashed, so I have no proof that it was received.  When the creditor either cashes the check or converts it to ACH, I know that they're received the funds.  It's proof that they were paid.  (Frankly, I'm not concerned that I lose the money a few days early, as I don't have the money in an interest-bearing account.  Our interest-bearing account pays 0.03% interest at this point.)

I can't figure out any reason for this, except that creditors may have to pay to receive push ACH payments and are too cheap to do so.  Given that, they can receive a check and convert it to ACH or take it to the bank and deposit it.  Most irritating, though, is the new way landlords have devised to eke more money out of tenants.  Some landlords now want to be able to pull auto-pay payments from their tenants' bank accounts.  And they charge a fee for tenants who won't allow this, and write checks for the rent.

Unfortunately tenants can't do much about this, other than passing on the unit.  And as more landlords start pulling this one, tenants are going to face a choice between paying more for the privilege of deciding how to give up their money or allowing some stranger to access their bank accounts.  Worse than that, the bank won't allow you to terminate the auto-pay without the consent of the creditor, so if your landlord pulled the money, for instance, after you moved, you'd have to go after the landlord to recover the money.

The State Legislature should intervene to stop this practice.  I have no other creditors who pull this stunt.  If landlords really want auto-pay, they should sign up for push transactions, and pay the cost.

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