Sunday, August 15, is the deadline forretail bank customers to “opt in” with their banks to signify their willingnessto pay overdraft charges in exchange for having the assurance that theirtransactions will be honored, rather than denied, in case of their havinginsufficient funds. The new requirement pursuant to Regulation Edefaults the non-responsive customer to the “opt out” position, meaning thattransactions can be rejected, including not only checks returned, but alsoattempted debit purchases and ATM withdrawals.
The new law requires consumers to choose before a bank is allowed to charge them for clearing a transaction involving insufficient funds. And many consumers want the coverage — even if it means the fee is much higher than the overdraft itself.
“It is disturbing that this many people live so close to the financial edge,” said Gail Cunningham, whose National Foundation for Credit Counseling found that 26 percent of respondents to a poll wanted the coverage. Locally, banks say they’re seeing an 80 percent opt-in rate.
“Anticipating that they will overdraw their account, they are willing to exacerbate the problem by paying a fee to have their purchases approved,” Cunningham said.