Waaay back in the 80s I had a US Bank account called "The Only Account". It was a savings and checking account joined together. The checking account always had a zero balance. When I wrote a check the bank transferred money from savings to checking and paid the check. Why didn't they just have one account, I wondered? They said it was because federal banking regulations didn't allow them to pay interest on checking accounts. So they had this nifty workaround. Fine by me! They didn't charge me anything for each check, just a small monthly account fee which I don't remember, and I never had to balance my checking account because it never had a balance, or worry about moving money into it. It was perfect!
Flash forward to the 90s when I got married and moved from Portland OR to Seattle. I walked into a US Bank to find out if I had to do anything to move my Only Account to their branch.
"Only Account"? the employee asked. "We don't have anything like that."
"Oh yes you do," I retorted. "Here's my US Bank checkbook. It says Only Account right on it."
"Ohhhh... that's US Bank of Oregon, we're US Bank of Washington." At this point she started talking to me like I was in kindergarten. "You see, we're like cousins - same family but not the same company. We have different rules."
"That's interesting," I said. "The New York Stock Exchange thinks it's ONE company called US Bank (symbol USB). I've personally owned the stock myself."
After some more mumbling I made her give me back the check I had given her for deposit and the application I had partially filled out, and I just took my money to my wife's credit union, where we've had a joint account ever since.
The point of this story is that banks don't need to create an overdraft account for you, deposit money into it as a loan when you overdraw a check, charge you interest on the loan, and charge you $15 or whatever for every time they do this. I don't know if US Bank of Oregon still has the Only Account or if they wised up to the missed profit potential and joined the "Oh I'm sorry we can't do that" crowd, but the truth is that banks CAN dispense with all the overdraft nonsense, BECAUSE THEY WERE DOING IT 40 YEARS AGO AND IT WORKED GREAT.
