California Supreme Court Rules on Social Security

June 8, 2009

The California Supreme Court recently ruled that banks are allowed to use cash from social security checks to cover the overdraft fees that are incurred by their customers. Though many believe that this is fair- after all, banks are allowed to charge fees to other customers that overdraft their checking accounts. Therefore, it only seems fair that those who receive their income from federal social security checks should face the same penalties.

However, many Americans have recently complained about the stiff fees that banks are allowed to charge. They have asked for further regulation. It is possible for a bank to charge a $15 or $20 fee for every time that a customer uses more money than they have in their bank account. This is a way for banks to make money. However, some are worried that such high penalties can be damaging to some of society’s most vulnerable citizens- the disabled and the elderly.

Instead of protesting the recent decision to use social security checks for overdraft fees, many have turned to protesting the banks’ heavy penalties for over-drafting on an account.