There's nothing like an overdraft fee to get my heart thumping and my blood boiling. It's been years, thankfully, since I've incurred one of the nasty buggers, and I've almost always been successful in getting them reversed.

But in college, I skated too close to a zero balance and ended up with the $35 latte or bottle of Pig's Eye from time-to-time. I also remember the time when a check I deposited didn't clear before I hit the ATM machine, the coffee shop and the gas station, causing a stack of ugly fees.

On these occasions, I always wondered why the bank couldn't just warn me with a friendly phone call or e-mail before gutting my account? Or why they didn't just deny the transactions altogether. Because overdraft fees are profitable to the tune of $24 billion in 2008, according to the Center for Responsible Lending.

It's not worth as much as a Wall Street bonus from a bailed out financial institution. But at least us little guys have the financial crisis to thank for one thing -- more consumer friendly regulations for credit cards and now overdraft fees.

According to the release:

  • For consumers who do not opt in, the institution would be prohibited from charging overdraft fees for any overdrafts it pays on ATM and one-time debit card transactions.
  • Before opting in, the consumer must be provided a notice that explains the financial institution's overdraft services, including the fees associated with the service, and the consumer's choices.
  • The final rules require institutions to provide consumers who do not opt in with the same account terms, conditions, and features (including pricing) that they provide to consumers who do opt in.

This doesn't go into effect until July 1, 2010. But many large banks, including Wells Fargo, U.S. Bancorp and TCF Bank didn't wait for the effective date. Earlier this fall these banks limited, but didn't eliminate, overdraft fees.

Some groups, such as the Consumer Federation of America, say we still need more protections in this area. The group would like to see the Overdraft Protection Act of 2009 (H.R. 3904) become law. The act would like to see several additional changes, including:

  • Ban on bank manipulation of the order in which withdrawals are processed which can drive up the number of overdrafts when funds are low.
  • Cap on the number of overdraft fees, limited to one per month and six per year, with banks required to offer lower-cost alternatives to keep covering overdrafts.
  • Warning before a withdrawal at the ATM or with a teller overdraws the account, triggering a fee.