BBVA Compass is sued over fees

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BBVA Compass is the latest bank to catch the ire of customers and attorneys because of overdraft fees.

In a lawsuit filed earlier this week, Houston-based restaurant company Fat Butter accused the bank of deceptive trade practices, claiming the bank posted debits out of the order they were made so it could increase overdraft fees.

For example, the lawsuit claims the bank pushed the largest debit through its account first, creating an overdraft, and then posted other smaller debits so a fee could be assessed for each transaction.

“It is spelled out in the lawsuit that the procedures the bank is following are to the detriment of the account holder,” said Marian Rosen, an attorney for Fat Butter.

Fat Butter filed the lawsuit, which is seeking class action status, in federal court in Houston.

Ed Bilek, a spokesman for BBVA Compass, said the bank's processes comply with all applicable laws. Transactions are posted on the date received by the bank, he said, noting that the order they're received may differ from the order the consumer actually made the transactions.

“You really can't do things in a chronological fashion, the technology just isn't there,” Bilek said. “But if you always have more funds than the transactions initiated, you don't run into a problem of fees.”

BBVA Compass, the U.S. operating arm of the Spanish banking giant Banco Bilbao Vizcaya Argentaria, has 85 branches Houston, including 27 recently acquired Guaranty Bank branches.

In Fat Butter's case, the business, according to the lawsuit, was charged more than $2,000 in fees because the bank allegedly reordered transactions to increase the number of fees charged.

In its contract with consumers, the bank discloses it may pay or charge items to accounts in any order, the suit says, but adds that the bank really always rearranges transactions from highest to lowest. Always reordering transactions is “abusive,” the litigation claims.

Lawmakers and regulators in recent months have criticized banks for trying to bolster profits by amping up fees, including those for overdrafts. Banks call such overdraft programs a courtesy, while consumer advocates say the fees force consumers to pony up billions without much choice.

Most banks introduced overdraft programs in 2001, according to federal regulators. About a quarter of banks nationwide process overdraft transactions by size, from largest to smallest, which can increase the number of overdrafts because the account gets overdrawn more quickly, according to a study by the Federal Deposit Insurance Corp. issued in December.

Federal lawmakers are considering legislation that would require banks to get permission from customers to allow overdrafts.

Earlier this week, Bank of America and Chase announced overhauls to how they charge such fees.

Bank of America said that starting Oct. 19, it will no longer charge overdraft fees if an account is overdrawn by less than $10 for one day. The bank also said it would make it easier to opt out of overdraft protection and cap the number of times it charges overdraft fees at four times.

Chase said it would eliminate overdraft protection for debit cards unless a customer opts in, post debit card transactions and ATM withdrawals in the order they occur, eliminate the fees if an account is $5 or less overdrawn, and cap the number of overdraft fees per day at three.

BBVA Compass Bank Complaints - Non-sufficient Funds Charges

BBVA Compass Bank

Posted: 2009-03-23 by "JAT "

Non-sufficient Funds Charges Company information: BBVA Compass Banm Jackosnville, Florida United States Compass Bank has charged my account about $250 in overdrawn charges stemming from an oversight that led to a $3 negative balance. By the time I saw the first $38 NSF charge, my online account information showed that a transfer wire deposit had posted and the account was no longer negative. What I did not know is that a small debit charge posted before the deposit, thus another $38 was charged. By this time, I had used my debit card twice more for small transactions, thinking I had a positive balance to cover them. Requests to remove all but the first charge were denied. I have refused to cover the negative balance of the account since all of this is due to ridiculous NSF charges. I have another checking account with Bank of America, so Compass can have their account, but not my hard-earned money!

Independent banks challenging Compass for Waco-McLennan County (Texas) market share

Aug. 01--BBVA Compass, an international powerhouse with $765 billion in total assets, has the largest share of the McLennan County banking market, the Federal Deposit Insurance Corp. reports.

But that does not mean the county has become a mecca for mega-banks. Far from it. The next four banks in the pecking order are locally-owned independents: 

-- First National Bank of Central Texas;

-- Central National Bank;

-- Community Bank and Trust; and,

-- American Bank. 

Figures show that Waco-area residents love to bank "where they not only know your name, but the name of your dog," joked Steve Scurlock, executive vice president of the Independent Bankers Association of Texas.

Scurlock said Waco's banking market is highlighted with medium-sized to small independent banks. "While Waco has a lot of the advantages of a big city, it still has a small-town feel," Scurlock said. "And of all the business entities that mirror that feel, I think community banks would top the list." 

McLennan County has 25 separate banking institutions. That is more than can be found in 10 of 11 metropolitan areas of similar size to Waco-McLennan County. In some communities, the numbers pale in comparison. Midland has only 13 banking institutions and Beaumont has 12. Tyler in Smith County has 27, beating Waco by two. 

Four major national and regional banks have a presence in McLennan County. They are BBVA Compass, Wells Fargo, Bank of America and JP Morgan Chase. Local deposits combined, they have 30.89 percent of local deposits. 

But the four largest independent banks in the county have 39.84 percent of local deposits. Seventeen other independent banks have a 29.97 percent share, according to FDIC figures as of June 30, 2009, the latest numbers available. 

Todd Moore, chairman and CEO of Alliance Bank of Central Texas, joined the fray in 2007, when he rounded up 140 shareholders to purchase the State Bank of Jewett, changed the name and moved its charter to Waco. 

It still has locations in Jewett and Donie, and has 1.31 percent of the McLennan County market. "It was a little bit of a risk," said Moore of his decision to move another independent to Waco. But he said he felt confident that his large and diverse ownership group, which included veteran bankers, would attract customers. He said several factors have made Waco a popular area for independent banks. 

He said local colleges and universities turn out students with degrees in accounting, finance and business that they put to use in the banking industry. 

He said Wacoans seem to have an entrepreneurial streak that pushes them to open their own businesses. He points to the handful of Waco-based companies that award franchises to would-be business owners. The list includes the Dwyer Group, Curves International, Profiles International and Success Motivation International.

Monte Hulse, chairman and CEO of the First National Bank of Central Texas, said many local bankers earned their stripes in independent banks and have perpetuated a culture of independence.

David Lacy and Bill Nesbitt started their careers at the old Citizens National Bank. Lacy now serves as president and CEO of Community Bank & Trust and Nesbitt is chairman and CEO at Central National Bank.

Waco branch Veteran banker Rodney Kroll, meanwhile, left independent Texas National Bank after it was bought by Compass in 1997. His investment group bought First State Bank of Riesel, changed the name to Texas First State Bank and opened a Waco branch. 

"Our independent banks are doing very well," Hulse said. "They are able to compete successfully with the larger chain banks and I think that will continue. 

"The reform issues the government has passed have tried not to harm community banks because lawmakers realize we had nothing to do with the problems of subprime lending." 

Scurlock, with the independent bankers group, said area residents should consider themselves blessed to have such a vibrant collection of independent banks. He said customers benefit from the competition.

Still, for now, BBVA Compass is the county's top bank in terms of market share for deposits, which total $428 million, or 12.95 percent. 

It gained that status when Compass bought financially troubled Guaranty Bank from the FDIC. Compass spokesman Ed Bilek said he knows independent community banks play an important role, but he said Compass provides services he thinks the independents just can't match. 

He said the bank now offers three credit cards, and a first-time homebuyer's program that waives payments and interest for the first three months. 

Its savings program gives rewards to customers who reach goals during the year.

"We want people to know we are a strong and stable bank that is actively lending," Bilek said.

BBVA Compass screws over small business owner

BBVA Compass Bank screws over another small business owner in Gainesville, Florida. Satchel Raye, the owner Satchel's Pizza, said he lost about $9,000 because of a series of events that began with the mailbox just outside his restaurant. BBVA Compass suggested he use a signature stamp for his bank checks. Soon a full order of checks were stolen out of of his mailbox, and someone fradulently began using his companies checks. When he notified BBVA Compass Bank they told him he was going to be out the $9,000 because they do not cover fraudulently written checks on an account that has a stamp signature.

To read more about this story go to the Gainesville Newspaper story at:
http://www.gainesville.com/article/20100720/ARTICLES/100729967/1139?p=1&tc=pg

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