New Overdraft Fee Legislation
As part of the new overdraft fee legislation, beginning August 15, banks will no longer be allowed to authorize debt card transactions if they overdraw your account …
… unless you tell them otherwise.
Until this new overdraft fee legislation takes effect, banks can continue their practice of authorizing transactions that put your account in the red, charging you an overdraft fee. Currently, banks also can allow you to withdraw more money than you have at an ATM, charging you an overdraft fee of at least $35.
But once the new regulation comes to fruition on August 15, this practice will be against the rules unless you “opt in” by authorizing your bank to continue automatically authorizing these transactions.
A word of warning: Banks are aggressively finding ways to line their pockets before this new overdraft fee legislation go into effect. I wouldn’t be surprised if they loosened their policy on this practice between now and August 15. You might be authorized for just about any transaction while they sit by and collect the $35 overdraft fee.
Indeed, some banks have already started a direct mail campaign that persuades account holders to opt in so that they are not affected by the new overdraft fee legislation. But I generally think this is a bad idea. If you do not have enough money in your account for the transaction, it stands to reason that you do not have enough money to pay the overdraft fee.
