Fed Restricts Overdraft Fees

Customers must opt in for coverage of ATM, debit transactions
By Nick McMaster,  Newser Staff
Posted Nov 12, 2009 1:06 PM CST
Customers use ATM machines at a Bank of America branch office, Friday, Oct 16, 2009 in Boston.   (AP Photo/Lisa Poole)

(Newser) – Starting in July, banks will have to get consumers' explicit consent before authorizing an overdraft—and the accompanying fee—on debit and ATM card transactions. Since the advent of the financial crisis, overdraft fees have become the biggest source of consumer fee income for banks. Congress is also considering making the amount that can be charged a proportion of the transaction cost, USA Today reports.

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