The Fed Finally Does Something Right: ATM Overdrafts as Opt-in Only
Holy crap! Those pricks actually did something smart! I'm speechless.
The U.S. Federal Reserve on Thursday banned overdraft fees on automated-teller-machine and debit-card transactions unless consumers have actively selected an overdraft protection service.
The rules go into effect on July 1.
"The final overdraft rules represent an important step forward in consumer protection," Federal Reserve Chairman Ben Bernanke said in a statement.
The rules do not cover fees for overdrawn checks, Fed officials told reporters. The Fed -- the U.S. central bank -- found that consumers were willing to pay fees to ensure that any overdrawn checks are paid, the officials said.
Nor do the rules bar fees on transactions from recurring debit-card transactions, such as ones consumers set up to make regular payments, the officials added.
Overdraft fees charged by banks total some $25 billion to $38 billion a year, officials said.
ATM and debit card transactions are typically discretionary purchases, the officials said. Consumers frequently use checks for bills that they want paid no matter what.