In an interesting and timely update to a previous post concerning bank overdraft fees, the Federal Reserve has announced that overdraft fees will no longer be allowed for most purchases. There is still an opportunity for banks to charge fees for some transactions, including those that are recurring, like monthly auto pays for cell phone bills as an example.
The rules go into effect July 1st, leaving the banking industry time to respond with creative changes. The industry has responded to the new credit card rules by increasing fees and charges before those new rules take place, and it will be interesting to see what changes they make in response to this threat on a huge revenue stream for them.
Yahoo News Article
One of the interesting parts of this article to me is that it seems like a direct response to Senator Dodd's proposal to strip the Federal Reserve of most of it's current authority. This also comes at a time when the public is looking for more action/magic bullet on the current economic situation, and if anything is a good image move for the Fed.
Fed Press Release
To those that want overdraft protection, it will now be most likely a "pay to play" set up. This opens the door for a consumer friendly/good PR bank to announce they will offer free overdraft protection, even if they already do.