Finally, Bank of America has announced that it will discontinue issuing over draft fees on debit cards. The decision is a result of new the new federal regulations that will force banks to request permission from cardholders before allowing overdraft services. As a result, Bank of American debt users will experience declined transactions when they spend money they don’t have. It’s about time too, because accidental charges in the grocery store or at Starbucks can procure overdraft fees that take a few business days to straighten out.
The down side is that overdraft charges on debit cards make up 60% of Bank of America’s overdraft revenue. Does this regulatory victory mean that banks who end their overdraft fee program, like Bank of America, will be seeking new sources of revenue? Will we see more fees in our future? Bank of America’s overdraft protection service will live on, but where will the new fees be found?
It’s too soon to tell if the new federal banking regulations will be effective. The end of overdraft fees on debit card transactions is small victory in the war between consumers and the banking industry. Hopefully measures like this will help us get back to the basic rule of spending: if you don’t have enough money, don’t buy it.