Tired of overdraft fees? The Federal Reserve has announced today, Nov. 12, new rules that would eliminated banks from charging overdraft fees to customers unless it has permission from the cardholder.

These fees make a substantial amount of money for banks and other financial institutions, according to this New York Times article.

Overdraft fees, which can vary but are typically around $30 to $35 per transaction, are charged incurred on every transaction made that cannot be covered by a person’s available account balance.

In 2009, banks are expected to make $27 billion from this tactic, according to the article.

The new federal rules will take effect next summer, July 1, and are aimed at reducing fees for smaller, more ordinary purchases such as restaurants and coffee shops. Checks will not be covered.

This move is seen as a response to criticism that the Federal Reserve has not moved fast enough to eliminate misleading lending practices.

For those that already have accounts, banks will not be permitted to charge overdraft fees without the cardholder’s permission.

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This entry was posted on Thursday, November 12th, 2009 at 4:27 pm and is filed under Corporate News. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.