5 We also issued new regulations that prohibit automatic enrollment in overdraft programs, requiring that consumers opt in before they can be charged for overdrafts created by ATM withdrawals and one-time debit card transactions. Furthermore, banks will be required to offer the same account fees and features to customers regardless of whether they opt in to coverage for debit overdrafts.
6 While the additional protections for consumers are long overdue, they will require considerable changes in bankers’ business practices and product pricing and design. The changes reduce the ability to build profitability models around penalty pricing such as overdraft fees or raising interest rates on existing credit card balances.