The rules will affect ATM withdrawals and debit card transactions, and are meant to protect consumers with an opt-in option. What does this mean?


Previously, banks would allow you to overdraft your account, and then because you over-drafted, they would hit you with their large fees. My bank was $29 per overdraft last I checked.

Now, they are not allowed to let you overdraft unless you explicitly ask. I think the idea is that since most folks won't purposely overdraft very often, they would rather be declined the purchase than pay a $29 fee.

Imagine if you overdraft your account buying $75 worth of groceries. The fee just made your bill $100 and you probably didn't know. However if you were declined, then you would have the option to just take things out of your cart, buy the $40 in groceries you can afford.

The banks hold the position that if you are lost on a dark lonely road and the tow truck guy will take your debit card, if you can't overdraft you can't get a tow home. They call it a favor to you. I disagree.

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    I'm torn on this. The NCUA (National Credit Union Association) is a staunch opponent of this regulation and they are non-profits owned by their customers. I generally trust their opinion on such things because they don't have the same profit motivations as commercial banks. Check out this link: atfcu.org/index.php/component/content/article/227 – JohnFx Apr 12 '10 at 0:54
  • Are they taking issue with the whole legislation, not just the overdraft part I think YMCbuzz was asking about? I have read lots of debate about being regulated to much, and I lean towards regulation I agree it is best to go slow an measured. I have sat here for 30 minutes reading and thinking and I am still unable to decidedly choose. – MrChrister Apr 12 '10 at 2:58
  • @JohnFx: I would think that the most helpful behavior would be to have a bank-by-phone procedure to request credit advances, so if someone really needed a cash advance (tow-truck situation) they could accept such a thing with full awareness of the fees involved. – supercat Dec 13 '15 at 23:30

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