Automatic Bank Overdraft Fees End On July 1; How Will Banks Recoup Their Losses?

This article in today's Washington Post explains that new rules on bank overdraft fees on debit cards go into effect on July 1:

The rules will prohibit banks from automatically charging overdraft fees. Instead, consumers can decide whether they want to use the service or would rather simply have their debit cards declined. In addition, some banks have stopped charging overdraft fees if the account is a few dollars in the hole -- eliminating the infamous $40 cup of coffee -- and are capping the number of charges each day.

If customers don't opt in, or if banks don't allow consumers to overdraft at all (which, as noted in an earlier post, is how Bank of American responded to the new rules), banks will want to make the money in some other way. The Post article suggests that one possible response is higher fees to maintain bank accounts in the first place. We'll see.

For earlier coverage of this issue, go here, here, here, and here.

Comments

[Jb1504]

Thank goodness!