Central bank, beating Congress to the punch, issues rules to curtail banks' practice of automatically enrolling consumers in overdraft protection programs

The Federal Reserve on Thursday released a new rule to prohibit banks from automatically enrolling customers in overdraft protection programs, which charge fees when consumers spend more than they have. Starting on July 1, 2010, all banks will have to ask their customers to opt in to overdraft protection plans for ATM and most debit card transactions.

Some banks charge as much as $39 when customers overdraw their bank account by even a few dollars. "The final overdraft rules represent an important step forward in consumer protection," Fed Chairman Ben Bernanke said in a statement. "Both new and existing account holders will be able to make informed decisions about whether to sign up for an overdraft service."

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