Banks cannot charge overdraft fees without customer consent
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Print Banks cannot charge overdraft fees without the consent of their customers. This we would think is a commonsense consumer friendly practice. However, banks have been charging their customers for overdraft protection without letting consumers opt out of such a "benefit."
This practice will be prohibited starting in July 2010.
Banks cannot charge overdraft fees on ATM and debit cards
The Federal Reserve Board on Thursday announced rules that prohibit financial institutions from charging consumers fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless a consumer consents, or opts in, to the overdraft service for those types of transactions.
Before opting in, the consumer must be provided a notice that explains the financial institution's overdraft services, including the fees associated with the service, and the consumer's choices.
Same account terms for those who opt-in or don't opt-in for overdraft protection
To ensure that banks don't discriminate against consumers who choose not to opt-in for overdraft protection, the rules require financial institutions to provide consumers who do not opt in with the same account terms, conditions, and features, including pricing, that they provide to consumers who do opt in. For consumers who do not opt in, the institution would be prohibited from charging overdraft fees for any overdrafts it pays on ATM and one-time debit card transactions.
"The final overdraft rules represent an important step forward in consumer protection," said Federal Reserve Chairman Ben S. Bernanke. "Both new and existing account holders will be able to make informed decisions about whether to sign up for an overdraft service."
