Despite many consumers logging onto various websites and complaining about the large fees they used to be hit with when they accidentally overdrew their checking accounts, experts say a surprising number have decided to enroll in similar programs.
According to a new report from Consumer Affairs, a "surprising number" of Americans either have opted in to the new overdraft protection plans, or will do so in the near future. One study on the subject found that 26 percent of consumers have already told their bank they would like to continue receiving this protection, and the same number said they will do so in the near future. This has come as a bit of a shock to many experts, who expected to see many consumers say good riddance to any additional bank fees they could be hit with.
However, the report said, there are some potentially good reasons for consumers to opt into these new programs after complaining so fervently about the old ones, which included fees as high as $40. For one thing, the new financial laws now regulate how much banks can charge if a consumer overdraws his or her checking account. But perhaps more importantly, many lenders have given consumers more options for dealing with overdrafts because they know it is now a voluntary program and they need to give their customers a good reason to enroll.
The report said that many banks are now offering a new way for consumers to handle a payment that makes their checking account sink into the red. For example, many will now allow consumers to attach their checking to a credit card account. This means that any purchases that would result in an overdraft can either be transferred in full or in part into their credit card account. Many banks also allow customers to link other accounts to checking, drawing funds – from savings, for example – as needed to cover purchases. Of course, these transactions will also cost consumers a fee, which can be either annual or on a per-transaction basis, but they will be less egregious than the old cost of an overdraft.
Federal law now requires all banks to ask consumers whether or not they want to enroll in these overdraft protection programs beginning on August 15. Institutions can no longer make participation compulsory.