New Bank Law Gives Customers Options
The new law requires banks to ask if you want overdraft protection on your account. If you accept, you can continue to purchase items if you do not have money in the bank, but the bank can charge you a bank fee. If you decline the protection, the bank will reject payments that would overdraw your account. A person can also have money from another account transferred to the account they want to use, but they might be charged a bank fee.
"I think it makes sense that you are giving the option to not have funds come out of your account," Jessica Canfield said.
Canfield says she has taken the opt-out position on overdraft protection because nine times out of ten she know how much money she has in her bank account.
Bank customers who open a bank account Thursday can no longer be charged overdraft fees without given their consent to banks, but existing customers can still get charged overdraft fees until August 15.
"I think is definitely offers consumers more choice and its makes the more aware of the choices they have," Financial Specialist Andrew Zumwalt said.
Zumwalt says declining to take the opt-in position on overdraft protection could pose potential embarrassment for bank customers, but Canfield says this isn't anything she worries about.
"I don't think its about being embarrassed. I think its about the financial integrity," Canfield said.
Some banks are not even offering the overdraft protection choice , instead they will just decline your card if you don't have enough money.
Bank of America, in a statement, says its new policy will just decline peoples' transactions if they don't not have sufficient funds in their accounts. They will eliminate overdraft fees for debit cards and no longer authorize transactions if no money is in a person's account.
"Ultimately it's the responsibility to monitor your balance,"Zumwalt said.
The new law does not apply to checks, pre authorized payments and recurring debit card transactions.