Overdraft Protection: New Rules for Banks and Consumers
This act aims to protect consumers from excessive overdraft fees by setting limits and requiring transparency. Citizens will gain better control over their finances, avoiding hidden costs and unexpected charges for overdrawing their accounts. Banks will be required to clearly disclose all options and costs related to overdrafts.
Key points
Banks can only charge overdraft fees with explicit consumer consent.
Overdraft fee limits: maximum one fee per month and six per year per account.
Overdraft fees must be reasonable and proportional to the overdraft amount and the bank's cost.
Banks must disclose alternative, cheaper options like linked accounts or credit lines.
Prohibition on charging overdraft fees solely due to debit holds exceeding the actual transaction amount.
Prohibition on charging non-sufficient fund (NSF) fees for ATM and debit card transactions.
Banks cannot report negative information to credit bureaus if overdraft amounts and fees are repaid as agreed.
Banks must promptly notify consumers when overdraft coverage is accessed, including transaction details and fees.
For one year after enactment, banks cannot increase overdraft or non-sufficient fund fees.
Expired
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