Rules Regarding Overdraft Fees to Change
Rules Regarding ATM, Debit Card Fees Change
Financial institutions will no longer be able to charge customers overdraft fees on automated teller machine (ATM) and one-time debit card transactions without the customer's express consent under new rules that are effective on July 1, 2010.
Before giving permission to pay overdraft fees, 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. The final rules, along with a model opt-in notice, are issued under Regulation E, which implements the Electronic Fund Transfer Act.
New rule intended to further consumer protection
The results of consumer tests conducted by the Federal Reserve Board show that most consumers prefer not to be enrolled in overdraft services for ATM and one-time debit card transactions unless they expressly opt in. At the same time, testing shows that most consumers want overdraft services to cover important bills, such as checks they use to pay rent, utilities, and telephone bills.
Rules also apply to those not opting in
"Overdraft fees can be costly," said Federal Reserve Gov. Elizabeth A. Duke, the chair of the Board's Committee on Consumer and Community Affairs. "Our rule will help consumers better understand the terms and conditions of overdraft services and will give them an opportunity to avoid fees when these services do not meet their needs."
November 25, 2009