Debit Card Overdraft Services: Will the Federal Reserve's New Rules Enhance Transparency and Consumer Choice?

Banking & Financial Services Policy Report, Vol. 29, No. 1, January 2010

10 Pages Posted: 25 Dec 2009  

Jennifer S. Martin

St. Thomas University - School of Law

Date Written: December 23, 2009

Abstract

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.

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

Suggested Citation

Martin, Jennifer S., Debit Card Overdraft Services: Will the Federal Reserve's New Rules Enhance Transparency and Consumer Choice? (December 23, 2009). Banking & Financial Services Policy Report, Vol. 29, No. 1, January 2010. Available at SSRN: https://ssrn.com/abstract=1527544

Jennifer S. Martin (Contact Author)

St. Thomas University - School of Law ( email )

16401 N.W. 37th Ave.
Miami, FL 33054
United States
305-474-2420 (Phone)

HOME PAGE: http://www.stu.edu/Default.aspx?alias=www.stu.edu/law

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