TCF Bank OVERDRAFT FEES, OVERDRAFT FEES, AND MORE OVERDRAFT FEES!! TCF is forcing overdraft fees and making customers think we are irresponsible consumers! Internet

But this time, changes are coming and analysts say that shareholders of TCF Financial Corp. have cause to be concerned.

The Federal Reserve is considering two alternative proposals aimed at protecting consumers from abuse of overdraft fees. One would require banks to obtain permission from customers before charging them overdraft fees on ATM and some debit card transactions. The other would require a bank to ask permission before enrolling someone in an overdraft program. A decision is expected by year-end.

The proposed changes could prove particularly painful for TCF Financial -- Minnesota's third-largest bank by deposits -- because it relies more on overdraft fees than most of its regional rivals. A research report by J.P. Morgan Chase & Co. estimated that 18 percent of the Wayzata-based bank's revenue is from overdraft fees. For this year, that will amount to about $200 million, according to J.P. Morgan.

During a July conference call with analysts, TCF Chief Executive Officer Bill Cooper seemed to dismiss the issue. "There's a lot of smoke about that," he said, referring to proposals concerning overdraft fees. He said that the technology doesn't yet exist to notify debit card customers when their accounts are about to be overdrawn. And even if it did, retailers and banks wouldn't want it.

"The merchants don't want that, the customers don't want it and the banks don't want it," he said. "So I'm fairly optimistic on that."

Cooper noted that, if the rules became too restrictive concerning overdraft fees, the bank could simply go ahead and charge monthly maintenance fees for its checking accounts -- effectively ending its highly popular "totally free checking" program. "That's where it will go back to," he said. "Totally free checking will disappear and there will be a monthly maintenance fee."

But some analysts who follow TCF aren't convinced that switching to such a fee would be painless for the bank.

Over the past two decades, TCF has built its retail business on the idea that its checking accounts are free (minus overdraft fees). To end that program is to risk eliminating a competitive advantage, some analysts argue.

In a July 26 research note, J.P. Morgan analyst Steven Alexopoulos cited the possibility of new rules concerning overdraft fees as one reason he was keeping an "underweight," or "sell," rating on TCF stock.

"If the company started charging customers $10 a month, we believe competitors with far less sensitivity to overdraft fees would use that as an opportunity to gain customers from TCF," he wrote.

J.P. Morgan has a 12-month price target of $14 a share on TCF's stock. The bank closed Friday at $14.20.

Although public outrage about overdraft fees has come and gone before, this time the movement comes at a particularly grisly time for banks. Consumers are "genuinely angry" about banks collecting large windfalls from overdraft charges and other fees as the economy struggles and a number of banks have received large injections of capital from the U.S. Treasury, said Uriah King, senior policy associate with the Center for Responsible Lending, a consumer advocacy group in Durham, N.C. This year, banks will collect $38.5 billion in overdraft fees, nearly double the $19.9 billion it collected in 2000, according to an estimate by research firm Moebs Services.

As the recession has intensified, large banks have found new ways to raise their fee incomes to offset declining revenue in other areas. For instance, this year Bank of America doubled its limit to 10 overdraft fees per account per day.