Online Publication Explains New Overdraft Rules
Federal Reserve Board rules that take effect July 1 will require banks to get customers' permission before enrolling them in overdraft services for ATM and debit card transactions. A new online Federal Reserve publication, What You Need to Know: New Overdraft Rules for Debit and ATM Cards, explains the rules and how they will affect consumers.
Board furthers financial education
The publication is one of a series of new guides available on the Board's Web site to help consumers make informed financial decisions. In addition to explaining the new rules, the publication contains basic facts about the types of overdraft services and the typical fees associated with them and a list of common terms consumers may see in communications from banks about overdrafts.
Rules give consumers options, flexibility
The new rules will allow consumers to make important decisions about overdraft services for ATM and debit card transactions. New and existing accounts are included in the rules, and consumers also may opt in or cancel the service at any time. However, the rules do not cover checks or automatic bill payments. The Federal Reserve's consumer testing shows that most customers prefer to have important bills, such as mortgage, rent and utilities, covered by overdraft protection.
Financial institutions will soon begin sending notices to customers that explain their overdraft services, the fees associated with overdrafts, and the consumer's choices; the publication includes a sample communication.
March 26, 2010