Are more $38 cups of coffee on the horizon?
The Consumer Financial Protection Bureau has opened a review of the decade-old federal “overdraft rule,” which regulates how banks charge fees when their customers spend more than what is in their checking accounts.
Under the rule, banks must get their customers’ express permission before charging a penalty for overspending, whether through most debit card purchases or A.T.M. withdrawals.
If customers don’t accept overdraft coverage, banks simply decline transactions that would drop an account balance below zero. If customers do “opt in” to overdraft coverage, the bank approves the purchase or cash withdrawal and charges a fee — typically about $35.
In fact, banks often charge an overdraft fee for each transaction that occurs while the account remains overdrawn. So the fees can add up quickly — although most banks cap the number of such fees they charge per day.