WASHINGTON — The Federal Reserve today adopted new rules that will require credit unions and banks to obtain permission from customers for overdraft protection programs on debit cards and ATM transactions.
Under the new rules consumers must be given a notice that explains the card policies, including fees. Without express permission from the consumer, the card issuer cannot charge for overdrafts at retail stores or ATMs The disclosures are required to be made in simple and easy to understand notices that customers should soon be receiving.
The opt-in, however, will not apply to checking because consumer studies showed that bank customers are more likely to accept such fees since checks are more typically used for more essential purchases. Nor will they cover overdrafts from recurring debit card transactions, such as to pay for utility or telephone bills that are set up in advance.
The rules will take effect for new cards on July 1. For existing accounts, issuers will not be able to charge overdraft fees without the permission of the cardholder after Aug. 15.
