Smart SpendingSmart Spending

Banks need customer consent for overdrafts

Starting in July, debit and ATM charges that overdraw accounts will be denied.

By MSN Money producer Nov 12, 2009 5:10PM
In a win for consumers, banks will have to secure customers' consent before charging exorbitant overdraft fees on ATM and debit card transactions, The Associated Press reports.

In other words: No more $35 charges against customers who accidentally overdraw their accounts for a $4 latte.

The new Federal Reserve rules announced Thursday require banks to notify customers of their overdraft services and give customers the option of being covered. If customers don't "opt in," any debit or ATM transactions that overdraw their accounts will be denied.

The changes take effect July 1. Overdrafts fees for checks and electronic payments are not prohibited by the new rules. Details can be found here.
Fed officials say banks earn as much as $25 billion to $38 billion annually from overdraft fees, the AP reported. That total includes check overdrafts.

"The final overdraft rules represent an important step forward in consumer protection," said Federal Reserve Chairman Ben Bernanke. "New and existing account holders will be able to make informed decisions about whether to sign up for an overdraft service."

Related reading:

451Comments
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

ABOUT SMART SPENDING

Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.

VIDEO ON MSN MONEY

TOOLS

More