We’ve already discussed the many changes happening with credit cards thanks to Congress, but they haven’t forgotten about debit card users.

Acting on pressure from Congress, USA Today reports that the Federal Reserve is planning new rules that will require banks to redo the way they handle overdraft debit card charges. From the story:

“The Fed’s move comes amid congressional outcry about high overdraft and bank fees that are pushing consumers deeper into debt.”

While plans to limit the amount of fees a bank can charge are in the works, this ruling will focus more on transparency. Consumers will have to be aware of a bank’s policies and be allowed to “opt in” to the program.

Currently, many banks automatically enroll consumers in an “overdraft protection” program. This program will keep you from having a card denied if you spend too much, but it could cost you a small fortune.

For example, many policies charge an automatic fee, sometimes as much as $100, if you go even one cent over your balance. And, because you may not be aware that your account is overcharging, you could continue to spend and rack up even more charges.

Those charges add up to become major moneymakers for banks. USA Today says they are “the single-largest driver of consumer fee income.” This year the fees are expected to bring in almost $40 billion! That’s nearly twice as much as big banks collect from credit card penalties.

Has anyone here ever been caught in the cycle of overdraft fees? I got burned badly once when I went a mere $3 over when a deposit check didn’t clear soon enough.

We’ll keep you posted on the new rules as they come out and take effect. Until then, keep an eye on your account.