Answers about Overdraft Fees and Protection

I have an overdraft line of credit with the bank to cover possible overdrafts. How will this new rule affect me?

The new rule applies to overdraft protection programs in which the bank charges a fee for paying an ATM or a one-time debit card transaction when the consumer does not have sufficient available funds in the account to cover the transaction.

The rule does not apply to the payment of overdrafts pursuant to:

  • Any line of credit subject to Regulation Z (Truth in Lending Act (TILA));
  • Any service that transfers funds from another deposit account held by you (such as the transfer of funds from a savings account to a checking account); or
  • A line of credit or other transaction in a securities or commodities account that is exempt from Regulation Z.

February 2011