The Federal Reserve will implement a new rule in July that will affect the income banks derive from overdraft fees.
The rule requires banks to give customers the option to choose whether they want overdraft protection on their ATM and debit cards.
If they don't choose overdraft protection, then any transaction using an ATM or debit card on an overdrawn account will be immediately denied. And banks won't be able to collect overdraft fees.
The new rule comes at the same time banks wrestle with higher regulatory costs, including replenishing the Federal Deposit Insurance Corp.' s deposit insurance fund.
But some bankers said it's not yet clear just how much of an effect the new overdraft rule will have on their balance sheets.
"I don't know that we know what the bottom-line impact is going to be," said Lyndon Wells, executive vice president of Intrust Bank. "The impact will vary depending on how many customers say they want to continue this service."
Wells and other bankers said it has been common practice to allow overdrafts among customers who infrequently overdraw their accounts and generally have a good banking history.
Intrust, a $3.5 billion bank, charges a $35 overdraft fee.
"Our charges are intended to be punitive so as to not make this credit source attractive," Wells said. "If you need to borrow money, you can do it less expensively."
Banks derive a portion of their overall income from overdraft fees. And that's why bankers said they expect to feel some effect from the new rule, though a few think it will be small.
"I think we're going to see a little bit of impact to our financials, but it's not going to be dramatic," said Julie Huber, chief operating officer of Equity Bank, a $430 million bank. Equity's overdraft fee is $30.
Steve Carr said his bank, too, should see a small effect from the rule.
"We're trying to put the numbers together to see the impact it will have on us," said Carr, president of Community Bank of Wichita, a $55 million bank.
Carr said he doesn't think it will be significant because his bank has a small customer base. Community Bank's overdraft fee is $27.50.
Carr said he's taking the new rule in stride, even with the likelihood that it will cost his bank more money.
It not only represents money lost from not being able to collect on ATM and debit card overdrafts, but also the expense of getting each customer to sign opt-in documents.
"I don't think anybody necessarily thinks it's good, but probably like most regulations, it's driven by a few abusers," Carr said.