Many people that hold an active checking account with a bank have received a letter stating the new changes, which has taken effect on July 1st, 2010 for new customers, and for existing customers the change will be in effect on August 15, 2010 on the overdraft protection. The rule states that unless the bank has permission to continue to have an overdraft fee any client that is making a purchase or withdrawing from the ATM and does not have any funds in their account the transaction will be denied.
According to the Federal Deposit Insurance Corp. (FDIC) in 2008, more than 75 percent of the banks were enrolling their clients automatically into the overdraft protection program. Some of the programs that the banks were using charged the client up to $39. Since the information that the banks were using was in the fine print and probably placed within the marketing materials, some of the banks customers felt that they were not fully informed especially since most people do not read the fine print.
Banking agencies are divided on whether customers will accept to join the program at the beginning but banks are waiting after August 15, which brings back-to-school then followed by the holiday season which will make about 95 percent of the customers opt in for some type of overdraft protection. Some of the banks are using the customers fear of embarrassment tool to keep customers from knowing that they have a choice of whether they want the program or not. The banks make about 8-28 percent of their revenue with the overdraft fee.
For many years now, society has been telling us to make sure that we understand what the document reads before signing to avoid any surprises down the road. To avoid any misfortunes always monitor your account and follow up on purchases or fees that you are not aware of or do not understand clearly. Many people have some type of a legal insurance to assist them with matters such as these. They have the peace of mind of being able to have an attorney review the document and explain to them what they are about to sign or get involved into.
If you have not received a letter from your bank, I suggest you contact your bank and ask about any new regulations that are taking effect.