One of the biggest gripes with banking has to be overdraft fees. Buying a pack of gum from the corner store without having the right amount of money in your account can cost you $35. Or maybe the stream of weekend charges that come in on Monday cause your account to overdraft. Minor purchases can bring big overdraft fees.
With overwhelming complaints from consumers, the government has decided to step in and intervene. As of July 2010, banks will be required to send a notice of overdraft fees and protection before consumers are able to sign up. The new Federal Reserve rules will cover overdraft fees incurred from ATM withdrawals and debit card purchases, but not checks or automatic debit payments.
While it will ease the pockets of the consumers it does come with some drawbacks. The American Bankers Associations speculated that banks might no longer offer free checking accounts or require minimum balances be kept to recoup some of the lost revenue.
Because consumers will have to opt-in for overdraft fee option, the new rules have not identified how those consumers’ fees will be calculated. Since the rules are in its beginning stages, more development will define the program.
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