There have been several changes in federal regulations lately with credit card companies but did you also know that your regular checking account has been affected with changes to. Here is the simplified version of what is going on.
Every Financial Institution has a Non Sufficient Fund charge (NSF) if you don’t have enough money in your account to cover a charge they will pay it for you then charge you a fee, the fee ranges from $10-$50 depending on who you bank with. With the new regulation, you (the consumer) have the right to say yes or no to that charge by opting in or out of the program, the program is called Overdraft Privilege Protection or ODP. ODP covers any checks you write, ACH’s, recurring debit card transactions, & everyday debit card transactions.
Opting IN: If you opt in to the ODP program, you are telling your FI that you agree to pay the NSF fee so that your charges clear your account in the event that your checking account is short on funds, and will pay it back with your next deposit.Opting OUT: If you Opt out of the ODP program then you are telling your FI that if you don’t have the money in your checking account that you want them to decline your card. At the time you swipe your card wither you use debit or credit, if there isn’t enough money there your charge is denied.This is how I look at it… If I am at the grocery store with a cart full of food, I’m with the cashier, she tells me the total and in my head I say…”Do I have enough in my checking to cover that”. WELL.. There are two out comes that will happen when I swipe my debit card if I am short on funds for my grocery purchase.*1.*If I opted “In” my card goes through and I pay the small fee associated with not having enough in my checking. I take my groceries home and feel okay. *2.*If I opted “out” my card is declined and I have to stand in front of the cashier and anyone else in line and look like a fool, then the poor stock boy has to put all my groceries away. While I walk out of the store with out my groceries & feel bad.I will take the 1st option. I will pay the NSF fee that the FI will charge me so that I can walk out of the grocery store with self-respect instead of being embarrassed.When your in your FI the next time ask them about it and get there pamphlet on it so you understand how it works.**Abbreviations:**NSF- Non Sufficient FundsODP- Overdraft Privilege ProtectionACH- Automatic Clearing HouseFI- Financial Institution