BAC got in trouble for this a few years ago -
http://en.wikipedia.org/wiki/Bank_of_America#Excessive_overdraft_fees
Excessive overdraft fees
In 1999, a class action lawsuit was filed against Bank of America for engaging in the practice of "Biggest Check First" check-clearing. Put simply, the bank clears checks and ATM/debit card transactions in order from biggest to smallest, with less regard to what time they come in during that business day. The lawsuit claimed that this is done on purpose: that the bank is manipulating the order of transactions to trigger more overdraft fees to collect.
Customers cannot avoid these fees by avoiding use of written checks; the bank employs the same practice for ATM and debit card transactions. Compounding the issue, the bank authorizes transactions in such a way that one debit card purchase - with funds that were available at the time of purchase - can trigger multiple overdraft fees.
When customers make debit card purchases through any modern bank, the charge is immediately deducted from their available balance. Technically, this is just a hold on the funds; the charge is not deducted from the actual balance until the merchant settles the transaction with the bank. At Bank of America, if the merchant does not settle within three business days, the funds are once again made available for spending. Thus, the same money can be spent twice. When the merchant does settle the transaction, these funds are again deducted, even if this overdraws the account, which can result in an overdraft fee.
Here's an example: A customer has $100 in her account. On Tuesday, using her debit card, she buys coffee for $3, a small amount of gas for $15, and $25 worth of groceries. The $43 she spent is immediately deducted, and her available balance decreases to $57. If the merchants with whom the customer made the Tuesday purchases fail to settle the transactions before Friday, the $43 shows up on the account as available, bringing her account back to $100. On Saturday she withdraws the $100 from an ATM. As of Sunday night, her account shows exactly $0 remaining available. On Monday evening, all of the merchants with whom she has made purchases the prior week settle their transactions.
When the customer checks her statement Tuesday morning, she finds three overdraft charges, for the three purchases on the prior Tuesday. The customer is naturally confused, as she had not overdrawn her account for any of these transactions when she made them on that day. However, because all four transactions clear on Monday, and the bank clears biggest items first, Tuesday's purchases are all listed after the $100 ATM withdrawal that occured four days later. The customer is charged three overdraft charges total, instead of one or none.
BOA's response is that their online banking and ATM systems should not be used to determine balance; customers should keep a written account register to be sure of their actual balance.
Bank representatives claim that "Biggest Check First" insulates the Bank from undue risk. By paying the largest items first, the Bank ensures that no loss is incurred on the largest items, and most risky items. Smaller items pose less liability to the Bank, and are therefore paid last. Also, the order in which checks are presented doesn't always correlate with their post time, because their negotiation can happen in a number of ways.
Bank representatives also claim that this benefits customers: larger transactions typically represent more important items on a customer's account such as a mortgage or rent payment, car payment, etc. By paying these items first, the bank helps insure that the customer's most important transactions go through.
The "Biggest Check First" policy is not unique to Bank of America, and is common among other large U.S. banks, such as JP Morgan Chase, Citibank, and Wachovia. It was this policy, in conjunction with the other practices listed above, that prompted the lawsuit. BofA paid a $9M settlement and the lawsuit was dismissed without an admission of fault; BofA continues to process transactions from highest to lowest amounts.
BofA has increased the length of time [debit card] authorizations are listed as pending in online banking from 1 business day to 3 business days to reduce confusion over the actual available balance.
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