Financial institutions will soon be banned on charging overdraft fees to their customers without giving them consent. This is an effort by the Federal Reserve to protect consumers who are being hit hard from the recession.
Financial institutions will soon be banned on charging overdraft fees to their customers without giving them consent. This is an effort by the Federal Reserve to protect consumers who are being hit hard from the recession.
3 comments:
This almost sounds too good to be true - I think this is a great idea in practice especially since we are seeing a movement towards almost all electronic money these days, but it could prove to not really be the final answer to the big picture. The new regulations do not address how banks should handle overdraft fees if customers sign up for the new programs, and this could be viewed that the Fed's new regulations do not go far enough for consumers. Banks will still be able to assess fees for overdrafts occurring from checks or recurring debt-card charges.
After reading this I realized that a few weeks ago I was calling to check my balance on the credit card and sure enough they read this same exact thing to me! The real question is going to be how the issues that these new rules create will be dealt with. What will happen when people say "yes" to the plan, there will still be debt. These are all questions that hopefully we can find an answer to soon.
It's nice to see that the government is trying to solve this information failure between banks and their customers, especially since it generates revenues of over $30 billion. It will be interesting to see how banks may try to alter their services in response to this, but this is a victory for consumers.
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