7 steps to protect yourself on the new overdraft rules

Posted: June 3, 2010 in Banks, Credit Unions, Overdraft
Tags: , , , , , ,

Less than 30 days…

Last fall the Federal Reserve published new compliance rules that require consumers to consent before they can be charged overdraft fees on ATM withdrawals and one-time debit card transactions. This applies to all financial institutions.

Banks and Credit Unions across the US will be mailing out letters explaining the overdraft services they offer and related fees going into effect July 1st. Existing customers will have until Aug 15th to opt in or opt out. New customers that open up accounts after July 1st must opt in or opt out of overdraft protection programs.

Take the following steps to protect yourself and your hard-earned money.

  1. Contact your bank or credit union if you have not received the letter explaining your options. Have them explain your options. Talk to their compliance officer if necessary!
  2. Be sure to read the letter if you receive one.
  3. If you choose opt in then you will be charged an overdraft fee if you go negative on an ATM withdrawal or debit card transaction. Know that this fee applies to each and every transaction that you go negative.
  4. Find out what fee you will be charged.
  5. If you do not respond to the letter, you will be considered that you have opted out of overdraft protection services. What this means to you…if you do not have enough money in your account to cover the ATM or debit card transaction your financial institution will deny the transaction!
  6. Ask your bank or credit union if they can automatically transfer money from another account you may have at their institution in order to avoid these fees.
  7. Be sure to take advantage of online banking, as well as mobile banking to provide you with the most up to date balance in your account.

In a competitive world of financial services, make sure your institution is in total compliance with all the new regulations coming forth. If you find them lacking in compliance, out of touch with you, lacking in service, staff lacking knowledge, MOVE YOUR MONEY!!!

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Comments
  1. Cecilia says:

    According to this, a fee is charged for overdrafts whether you opt in or opt out. I’m not sure where the advantage is. Can you please clarify?

    • Hi Cecilia,
      Forgive me it I wasn’t clear on this. If you opt in, the financial institutions will charge you a fee for overdraft protection. If you opt out, then then cannot charge you a fee, however, it your account doesn’t have the money, they will deny the transaction. Most people I’ve talked to are opting out.