
In a very strange development, the Federal Reserve announced Thursday that banks will now have to gain customer consent before charging large overdraft fees on ATM or debit card transactions.
Apparently the rule was devised to curve complaints from consumer groups, members of Congress and other regulators that bank overdraft fees were unfair. The groups claimed that banks would charge $25 to $35 in overdraft fees, even if the funds were not available in the accounts, making the owner of the account subject to further fines and fees.
Under the new Federal rule scheduled to take effect July 1, banks will be required to notify both new and existing customers of the their overdraft servcies and give customers the option of being covered. Customers who do not “opt in” will cause any transaction that exceeds their account balance to be denied.
This may have a huge impact on the banking industry, figuring that most banks will accrue $25-$30 BILLION a year in overdraft charges.
One has to ask what effect this will have on bank lending, account establishment and minimum balance practices.









