Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC), Citibank (NYSE: C) and Others Hit by New ATM and Debit Card Regulations

Mega-banks including Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC) and Citibank (NYSE: C) will soon be significantly limited in the amount of gotcha fees that they can charge you when it comes to overdrafts next summer.

Typically when a customer goes to an ATM, a bank will allow them to withdraw money even if they don’t have the funds in their account to cover the withdrawal. The reason for this is because it will trigger an overdraft that will result in the bank collecting massive amounts of fees from the customer.

Often the account balances that an ATM reports generally don’t provide the best picture of where your account balance is currently at, only your balanced checkbook can do that. Your bank’s ATM might lead you to believe you have money in the account when you may have actually already spent it.

There will also be new regulations coming into effect relating to debit cards. Banks will not be allowed to approve point of sale transactions that exceed your account balance unless you give them express permission to do so. This means that you will have to tell your bank in writing or with an electronic signature on the bank’s website that it’s okay for them to give you money that you don’t actually have and instead charge a massive overdraft fee for the privilege.

Citibank, Wells Fargo, Bank of America and other banks are, as expected, unhappy with the new regulations. Some estimates state that these companies generate over $38 billion annually in overdraft fees.

At the end of the day it’s the responsibility of the consumer to keep track of their account balances, but with ATM transactions, checks auto drafts and debit cards, that’s becoming an increasingly difficult proposition. Despite those difficulties, consumers still need to get their account balances in order and under control.