Oregon Bankers Association Encourages Consumers to Consider Their Overdraft Protection Options as August 15 Deadline Approaches
SALEM, Ore., July 20 /PRNewswire-USNewswire/ -- Recent federal regulatory changes will require banks to change overdraft practices that apply to checking accounts. An overdraft occurs when a consumer does not have enough money in an account to cover a transaction, but the bank pays it anyway.
The Oregon Bankers Association (OBA) wants consumers to know that the changes will require banks to discontinue overdraft protection for ATM and everyday debit card transactions unless consumers affirmatively agree, or "opt-in," to overdraft protection and the corresponding fees for these transactions.
For accounts opened prior to July 1, 2010, the new overdraft rules take effect on August 15. Customers who have not opted-in to an overdraft program by this time will lose their protection. Consumers should inform their bank if they would like to continue to apply overdraft services to their ATM and everyday debit card transactions.
Many banks offer some type of overdraft courtesy service designed to help customers in those rare occasions when there are not sufficient funds in their account to pay a transaction. In those cases, the bank would advance funds, creating an "overdraft" or a negative balance in the customer account. The overdraft is then typically repaid with the next deposit. This service allows the bank to cover a customer's unexpected expense or a recordkeeping error. A fee would then typically be charged to cover the cost of this special service.
Not all banks offer the same products. Many different types of overdraft protection plans are available. Consumers are encouraged to contact their local bank for additional information and determine the best plan for their financial needs.
More information on the new overdraft rules is available on the Federal Reserve's consumer information website at www.federalreserve.gov/consumerinfo/wyntk_overdraft.htm.
About The Oregon Bankers Association
Established in 1905, the Oregon Bankers Association is Oregon's only full-service trade association representing state and national commercial banks, thrifts and savings banks chartered to do business in Oregon. More information is available at www.oregonbankers.com.
SOURCE Oregon Bankers Association