It's time for a ticker tape parade! The Federal Reserve initiated some much-needed policies protecting consumers from bank overdraft fees today, as
reported in The Los Angeles Times.
Effective July 1, 2010, the Fed will require banks to inform consumers of the rules and fees relating to overdraft charges before they can sign up for overdraft protection. Debit card holders without overdraft protection will now simply have their purchases and ATM withdrawals rejected if their bank account is lacking in funds.
Overdraft fees run from $10 to $38 per transaction, a 2008 study by the Federal Deposit Insurance Corp. revealed. Banks made a stunning $21.5 billion on overdraft fees in the first half of this year.
The new policies will not apply to overdraft protection for checks and recurring transactions (like bills), which means banks will still be able to slap some fees on you without disclosure or consent.
The Fed says its research suggested that most Americans still want overdraft protection for these types of transactions, although some consumer advocates argue the new rules should have covered everything. Congress is currently considering legislation to ban overdraft fees on these overlooked transactions.
The L.A. Times pointed out that these new policies exemplify the perspective of Fed Chairman Ben S. Bernanke, who is in favor of regulation to protect the consumer. This is a marked difference from former Chairman Alan Greenspan, who had what The Times called a more "hands-off attitude."
Did the Fed do enough, or should they have banned all overdraft protection? Have you had trouble with overdraft fees in the past?
Comments (5)
Yes, Overdraft charges are a scam. Most Tellers have the ability to negate most of the charges but refuse to simply because it is so much profit for the bank.
@schallerbrandon@xanga - Yeah, I've gotten two dropped by just calling my bank (PNC) and complaining.
THIS SHIT HAPPENED TO ME SO MANY TIMES I ALWAYS HAD TO FUCKING CALL TO REVERSE MY SHIT AND SOMETIMES THEY DID AND SOMETIMES THEY DIDN'T! IT FUCKIN' PISSED ME OFF TO NO END! IT'S ABOUT FUCKIN' TIME SOMETHIN' IS DONE ABOUT IT! AND I SAW ON THE NEWS ONE TIME THAT YOU CAN ACCESS YOUR SHIT ON YOUR IPHONES OR SOME SHIT AND THIS DUDE HE CHECKED IT FROM HIS PHONE OR WHATEVER AND HE THOUGHT HE STILL HAD MONEY TO SPEND BUT WHEN HE CHECKED ONLINE OR WAS IT AT THE ATM AND IT SAID HE HAD OVERDRAFTED AND HE WASN'T NOTIFIED OF IT SO HE TRIED TO REVERSE IT AND THE BANK DIDN'T DO SHIT TO HIS ACCOUNT! HOW FUCKED UP IS THAT?!
I contributed to the $21.5 million at the beginning of the year. x_x There have been many Youtube videos on how BoA overdraft fees are a scam. All of their solutions are the same: AVOID BoA!!!
I'm glad that they just did this much. I think they should do more, but this is a great start. :)