Bank gives 24 hours before overdraft fee

Here is one of the most shocking stories we've heard in a long time: Huntington National Bank in Ohio is planning to notify its customers if their accounts are overdrawn and give them one business day to deposit the money and avoid a fee.

This policy is apparently unique, though some large banks will waive fees if the customer overdraws the account early in the day and brings in a deposit later that day or will waive fees if the overdraft amount is less than $5. Post continues after video.

Dan Walsh, president of the Cleveland region of Huntington Bank, explained the new policy to Teresa Dixon Murray of the Cleveland Plain Dealer:

We're listening to our clients who are frustrated with fees. We're trying to break away from the pack. … Consumers today need more time in their lives.

Sad to say, any type of customer service these days will raise a bank above the level of the companies we love to hate. At my bank, I consider it good customer service if I can find a parking space and don't have to stand in line to get the parking ticket validated.

Huntington Bank will notify customers by text message and e-mail if their accounts are overdrawn. Customers are automatically enrolled in the service, though they have to provide e-mail addresses or cell phone numbers to receive the alerts.

The 24-hour grace period starts when the check comes in, not when the customer is notified. The notices go out first thing in the morning, and the customer has until the end of the day to make a deposit. Real-time alerts will start next spring. The policy does not apply to business accounts.

Nessa Feddis of the American Bankers Association said she was not aware of any other bank that offers a 24-hour grace period to avoid an overdraft fee. "This is definitely aggressive," she told the Plain Dealer.

Several banks, including Chase and Fifth Third, offer text alerts if the balance drops below a certain level and allow the customer to avoid overdraft fees by making a same-day deposit, the newspaper reported.

New rules that went into effect Aug. 15 bar banks from charging overdraft fees on debit card and ATM transactions unless the customer has agreed to such fees. Instead, if the customer goes to buy something and doesn't have enough money in the account, the bank can decline the card. The rule doesn't apply to checks or online bill payments.

This was to avoid the situation in which a person could make five small charges early in the day, make a sixth charge later in the day that depleted the account, and be charged six overdraft fees of $25 to $35 each.

The Columbus Dispatch reported that Huntington Bank will lose $24 million next year because of this program and other changes to accounts.

The bank hopes to recoup its losses by gaining new customers who are mad at banks, certainly a large potential customer pool.

Ben Popken at The Consumerist spoke to the radio show Marketplace about the bank's policy, and noted that it's not all wine and roses at the bank. If the customer doesn't rush in and make a deposit after being notified of an overdraft, he'll still pay a fee. Popken told Marketplace:

A fee is a fee. Even if it's delayed, it's still going to hurt. Before we punch you, we'll give you a 24-hour chance.

More from MSN Money:

• Should you opt in for overdraft protection?
• Customers tell banks: Decline my card!
• Fed up with your bank? 3 tips for simple switching
• Banks punish perfect customers
• Suze Orman says we should all pay cash
• Is it time to join a credit union?