Banks need customer consent for overdrafts
Starting in July, debit and ATM charges that overdraw accounts will be denied.
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.
"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."
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