Overdraft protection

There’s a justice in overdraft protection fees: Those who are careless in their spending pay penalties that support banking services for the rest of the population, services such as free checking.

But where’s the justice in allowing someone who doesn’t have enough money to buy that $4 cup of coffee to put it on his debit card anyway?

The Federal Reserve wants to rein in that kind of spending/fee structure. Beginning July 1, banks will not be allowed to charge overdraft fees without first getting permission from customers. It’s not clear who would choose to be charged $30 extra for the privilege of overdrawing his account to buy something he can’t afford. But there are plenty of Americans who are happy to have that kind of buying power.

Bank of America has announced that this summer, it simply will no longer allow debit card purchases to go through if there isn’t enough money in the account. The transaction would be rejected, as it should be.

Such policies might force only a small change in consumer habits, but a small step toward sanity is a positive sign.

The downside of this is that bank customers who have grown used to the benefits — thanks to the minority of customers responsible for the vast majority of overdrafts — might find themselves paying a little more for bank services.

Likely, banks still will compete for the good customers. Here’s hoping that responsible consumers can be rewarded for their behavior.

— Loveland (Colo.) Daily Reporter-Herald