The Overdraft Fee: Soon A Thing Of The Past

Nov 12, 09 The Overdraft Fee: Soon A Thing Of The Past
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Finally, some rules have been passed that will actually benefit the American people.  The Federal Reserve will regulate overdraft fees, which have been a boon to the banking industry at our expense.  Effective next summer, banks will have to notify consumers about their overdraft fee policy and will not be able to charge consumers for overdrafts at stores or ATMs without express permission from the customer.  For all of us fed up with the notion of an overdraft fee this news could not have come sooner.

These rules are supposed to help protect customers from overdraft fees that can significantly higher than the items they are purchasing.  Checks and recurring payments will not be covered under the new rules.  Bank customers should begin receiving a thorough description of the new rules in relative short order.  The Fed has made these rule changes ahead of proposed legislation in Congress as well as President Obama’s call for a Consumer Protection Agency.

Banks make between $25-35 billion dollars in overdraft fees each year.  Since the banking industry collapsed and the taxpayers bailed them out, many economists and analysts have expressed dismay at the continued lack of financial industry oversight.  These rule changes represent a substantive change in policy that will greatly help the bottom lines of many people.  Soon, you will not see an overdraft fee unless you opt-in.

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