WASHINGTON — Community bankers are up in arms about a Federal Deposit Insurance Corp. plan that would require banks to give customers a chance to opt out of overdraft programs for checks and other transactions, arguing it is burdensome, restrictive and would put them at a competitive disadvantage to the largest institutions.

The agency's August proposal goes further than the new rules put in place in July, which required customers' permission before charging overdraft fees on debit cards and automated teller transactions. Instead, the FDIC plan would additionally restrict checks and automated clearing house transactions, and urge banks to help consumers with more than six overdrafts a year to find less costly alternatives.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.