Banks Limited On Overdraft Fees

They can't charge you unless you volunteer in advance.

That's the upshot from the new Federal Reserve regulations.

"Regulation" is in in Washington because of the perception that the unfettered free market caused this housing mess.

The Washington Post reports:

The Federal Reserve will begin banning banks from charging many overdraft fees unless customers sign up for the service, an unprecedented move that comes as a wave of consumer reform sweeps Washington.

The new regulations, announced Thursday, cover overdrafts from ATM withdrawals and debit card purchases, which account for roughly half of overdrawn transactions, and help to address widespread complaints that consumers who were unaware they had insufficient funds were being charged exorbitant fees for purchasing a cup of coffee, for example. The rules, which take effect July 1, 2010, come as banks have drawn increasing scrutiny in the wake of the financial crisis for charging high fees and interest rates at a time when consumers are financially strapped.