Debit Card Overdraft Services: Will the Federal Reserve's New Rules Enhance Transparency and Consumer Choice?
Jennifer S. Martin
St. Thomas University - School of Law
December 23, 2009
Banking & Financial Services Policy Report, Vol. 29, No. 1, January 2010
While the appearance of debit and credit cards is similar, the attributes have significant differences, particularly when it comes to account overdrafts. This does not suggest that credit cards are somehow superior products, as complaints abound concerning credit card fees. Nevertheless, consumers don’t always appreciate card differences, believing cards are mostly the same. There are real differences when it comes to account overdrafts. This essay supports the opt-in approach of the Federal Reserve's final rules on overdraft services, but cautions against bank practices that undermine transparency. This essay also observes that as payment systems continue to change, the issues associated with developing payment systems may require more frequent attention, suggesting that a Consumer Financial Protection Agency would allow the issues to receive the attention of a primary regulator.
Number of Pages in PDF File: 10
Keywords: debit card overdraft services, banking, federal reserve rules, consumer payments, credit, debt, atm, financial protection agency
JEL Classification: K1, K10, K12, K19, K2, K20, K23, K29, K3, K30
Date posted: December 25, 2009