TCF to Give Customers a Choice on Covering Overdrafts

TCF Financial Corp. in Wayzata, Minn., will soon offer its customers two options for paying overdraft fees on checking accounts.

Starting March 20, TCF customers will have a choice of paying overdrafts on the traditional per-item basis or paying a single daily fee to cover all overdrafts on a given day.

Jason Korstange, a TCF spokesman, said Thursday that the $19 billion-asset company had been piloting the daily-fee option in Michigan for the past year and decided to roll it out companywide to potentially save customers from paying multiple fees when their accounts fall below zero.

There is a catch, though: customers that choose the the daily fee option must pay the overdraft the next business day. There is no such requirement for customers who choose to be billed per item.

Korstange said that the daily fee option is not for everyone, particularly customers who are paid monthly and might not have the funds to pay the overdraft within 24 hours. Indeed, he acknowledged that in markets where the daily fee is now the only option, some customers actually left TCF and moved accounts to other banks.

Korstange said that it is too soon to know how the changes in overdraft policies will effect TCF's bottom line. In the fourth quarter, the company said that its fourth-quarter profits fell 49% from the prior quarter due largely to new caps on interchange fees that sharply lowered fee income and partly due to declining overdraft fees.