Effective July 1, 2010, the Federal Reserve Board new rules will prohibit financial institutions from charging you fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions without your consent.
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Ending Bank Overdraft Fees

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Have you ever overdrawn your debit card and found that penalty overdraft fees charged by your bank were higher than your overdraft amount? Overdraft fees can certainly add to mounting financial problems.

Because overdraft fees can be costly, a new rule put in place by the Federal Reserve Board is designed to give everyone an opportunity to them, if you so choose.

OVERDRAFT FEES ARE OVER IF YOU CHOOSE

There's good news about those overdraft fees; you have the option to make them go away.

Effective July 1, 2010, the Federal Reserve Board new rules will prohibit financial institutions from charging you fees for paying overdrafts on automated teller machine (ATM) and one-time debit card transactions, unless you consent, or opt in, to the overdraft service for those types of transactions.

If you don't opt in, the financial institution would be prohibited from charging overdraft fees for any overdrafts paid on ATM and one-time debit card transactions.

Before opting in for overdraft service, you must be provided a notice that explains the financial institution's overdraft services, including the fees associated with the service, and other choices.

OVERDRAFT PROTECTION VS. OVERDRAFT FEES

Most people may prefer not to be incur fees for ATM and one-time debit card overdrafts. However, most people do want overdraft services to cover important bills, such as checks used to pay rent, utilities, and telephone bills.

To ensure that consumers have a choice, the new overdraft rules prohibit financial institutions from discriminating against consumers who do not opt in. If you don't opt in for overdraft services, you will still have the same account terms, conditions, and features (including pricing) as consumers who do opt in.

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



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