Fed rule will limit overdraft fees charged by banks, credit unions

The Federal Reserve released a long-awaited rule Thursday requiring banks and credit unions to get consumers' permission before charging steep fees to pay debit card and ATM overdrafts.

The final rule, which comes amid intense congressional scrutiny of bank overdraft practices, will take effect by July 1, 2010, for new customers and Aug. 15, 2010, for existing customers. The Fed released a preliminary rule on debit card and ATM overdrafts late last year, but didn't say then if it would require banks to get consumers' consent before signing them up for these programs.