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Jul 2, 2019 by |

California and Bay Area Consumer Attorneys: Consumer Protections on Bank Overdraft Services


Government Rules on Overdraft Charges for ATM and Debit Card Transactions

Knowing Your Rights On Overdraft Services

Have you been hit with overdraft charges on ATM withdrawals and debit cards for overdraft services you never authorized? If so, you should know that your bank cannot levy those charges unless the bank has followed very specific disclosure steps on overdraft charges for ATM and debit card transactions and you have consented (opted in) for those services.

Since July 1, 2010, the Consumer Finance Protection Board’s Regulation E (officially known as The Electronic Fund Transfer Act, 15 U.S.C. § 1601 et seq.) prohibits your bank from charging you these fees unless:

  1. You were provided with a notice in writing, (or electronically if you agreed to that) separate from any other information, explaining the bank’s overdraft service;
  2. You were given a reasonable opportunity to affirmatively consent (opt in);
  3. You did opt in to the service; and
  4. The bank confirmed your opt in in writing (or, electronically if you agreed to that), which included a statement informing you of the right to revoke such consent, or opt out.

The opt-in requirement applies to any ATM transaction (e.g., withdrawing cash, inter-account transfers, and bill payments) at any location (institution-owned and operated or third party), and any one-time debit card transaction (at a merchant or store, online, or by telephone). The opt-in requirement applies to bank accounts, prepaid accounts, and payroll card accounts. These rules do not apply to check transactions, recurring debits, or ACH transactions.


The July 1, 2010 opt-in requirement applies to both new and existing accounts. For accounts opened before July 1, 2010 (existing accounts), an institution must not assess any fees or charges on or after August 15, 2010, for paying an ATM or one-time debit card transaction, unless the consumer has affirmatively consented to the overdraft service for those transactions. For accounts opened on or after July 1, 2010 (new accounts), institutions must obtain affirmative consent before assessing fees or charges on the consumer’s account for paying an ATM or one-time debit card transaction pursuant to the institution’s overdraft service.

Banks may collect overdraft fees on ATM and debit card transactions without having notified you of your rights and without your consent. If so, your bank may have violated the CFPB’s Regulation E and the charges against your account must be reversed.  If you’re in California and you are being charged for overdraft services you did not sign up for (“opt in”) you may have a claim against your bank for improper charges.  The Call the consumer and banking attorneys at Evans Law Firm and we may be able to help.  Our number is (415) 441-8669.

Contact Us

Ingrid M. Evans and the other California and San Francisco consumer, securities, financial elder abuse and annuity and life insurance attorneys can be reached at Evans Law Firm (415) 441-8669, or by email at <a href=””></a>. Our attorneys have experience with complex financial contracts and large insurance companies. We can help guide your case through a jury trial or toward an equitable settlement.  We also handle cases involving physical and financial elder abuse, qui tam and whistleblower law, nursing home abuse, whole life insurance and universal life insurance, and indexed, variable, and fixed annuities.

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