Fed Cracks Down On Overdraft Fees

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payday loansIn an ongoing attempt to make the banking system more user friendly, the Federal Government has cracked down on  the overdraft protection system that signs people up automatically. These programs then automatically charge fees when people spend more than they have.

By next summer, all banks will need to ask clients if they want to opt into the overdraft protection system. This will apply to ATM machines as well. The problem stems from the fact that some banks charge close to $40 when their clients go into overdraft.

Fed Chairman Ben Bernanke made a statement about the way the government is looking to protect the consumer.

“The final overdraft rules represent an important step forward in consumer protection,” the statement reads. “Both new and existing account holders will be able to make informed decisions about whether to sign up for an overdraft service.”

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