Last chance to share thoughts with Fed about overdrafts

Less than two weeks remain to submit comments to the Federal Reserve about bank overdraft fees, the charge assessed when you overdraw on your checking account. On the table are new regs for how the fees are levied.

Currently, most banks offer some kind of overdraft program, according to a study by the FDIC. The problem is that the service is often provided automatically, without the consumer's explicit consent. So pull out cash from an ATM or make a purchase with your debit card without sufficient funds and the bank will cover the difference temporarily--for a fee.

The FDIC found that banks charge a median fee of $27 for each "courtesy" overdraft. Now $27 might seem reasonable if say, your average ATM or POS transaction ran into the thousands of dollars, and you didn't frequently use your card. But what do you typically use your bank card for? Withdrawing say, $100 from the ATM? Making regular purchases, such as groceries? Taking the wife out to dinner? And every time one of those transactions leads you to overdraw, you pay $27--with little, if any, warning.

In response to consumer complaints--one person, Karney Hatch, got so angry that he made a documentary about bank overdrafts--the Fed is proposing some new rules: Consumers must be given the choice to opt out of automatic overdrafts or, even better, must elect to opt in to the courtesy service.

Sound good? Let us know, and then send comments to the Fed at regs.comments@federalreserve.gov (include Docket No. R-1343 in the subject line of the e-mail).

In the meantime, you can reduce fees by signing up with your bank for overdraft protection. How it works: money is transferred automatically from another account, say your savings, anytime your checking balance falls to zero. The typical fee for that? $5.