Overdraft Coverage? You Choose!

overdraft protectionCongress recently passed a bill which was full of regulatory changes designed to protect the consumer. One of those changes regarding overdraft fees will have a noticeable immediate impact on consumers who use banks and their services via an ATM or Check Card.

I recently logged onto US Bank’s banking website to do my online banking transactions for the week which is pretty routine. As I looked over my current balance and recent transactions, I noticed a red text alert at the top of the page. The text alert was giving me notice about upcoming changes to the ATM and Check Card overdraft coverage. Once I clicked on the link there were two paragraphs on the new page. The first paragraph was short and simple. The bank wanted a YES or NO answer from me regarding my preference for overdraft protection. The second paragraph was more informative. It read as follows “Federal regulations now require banks to obtain your consent to authorize, pay and charge for ATM and everyday Check Card transactions. These rules will take effect August 15 for existing accounts.”

Immediately following the legal notice, I was prompted to choose my preference by selecting YES if I would like US Bank to cover my ATM and Check Card purchases in the event I have insufficient funds in my account. The other option is selecting NO and they will not authorize the expense and cover the bill. I selected NO. However, after reading the fine print, there are still three areas of account overdraft protection that are still covered as part of US Bank’s standard overdraft coverage. The defining factor is that you now have control over the two ways most people overdraft the most, ATM transactions and everyday Check Card transactions.

In addition to the above change, banks will also be changing their fee structure for overdrafts. For example, US Bank will be reducing their total fee from up to $37.50 to a slightly lower fee of $33. The total overdraft fee will be based on the dollar amount of the overdraft. If you overdraft your account by $20 or less, the fee will be $10 for each overdraft item. For every item greater than $20, the fee will be $33 for each overdraft item. Lastly, there will be a $25 per week fee beginning the 8th calendar day and each additional week the account is in the red.

Although I made these changes with US Bank, I still need to make the same change with each financial institution I bank with. Be aware, change with one account does not cover all of your accounts if you bank with multiple institutions. Please be sure to inquire with your financial institution to find out what exactly is changing and by how much. If you find yourself on the fence when it comes to choosing YES or NO, I would highly recommend choosing NO. By not having that added sense of ‘security,’ you will force yourself to keep a better account of your finances or risk being denied at the register.

Which will you choose?

3 Replies to “Overdraft Coverage? You Choose!”

  1. This is good they changed the rules. It’s ridiculous to get charged 30+ dollars for overdrafting by 1 damn dollar. Once I was charged for overdrafting my account by 34 damn cents.

    A lot of people strictly use their checking accounts to pay bills and put just that amount there. And not all people have savings accounts with the same bank as their checkings so OD protection isn’t always available.

    Or sometimes you just fall on hard times.

  2. I agree. If you don’t have the money, you don’t have the money and this will keep you from overspending.

  3. By Selecting YES a consumer STILL DOES have the option to make a deposit into their account before the end of the business day and your transactions will still be covered. Many of the larger financial institutions offer convenient methods to make a deposit into your checking account. One method is using what many called a Deposit Friendly ATM. Deposit Friendly ATMs require no deposit slip or envelope. Just the checks or cash. Some ATMs will process deposits the same day until 11 p.m. This late night deposit will still cover a transaction you did at 9 pm when your bank was closed. Generally you receive faster credit for checks in the ATM as opposed to a deposited made with a teller inside a branch.

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