How to Make New Banking Laws Save You Money

moneyIf you have a habit of throwing out those extra pieces of paper from your bank, you may have missed a chance to save yourself some big money

Banks are in the process of sending their customers notice of Regulation E, part of the federal government's new financial regulations to protect consumers.

It's nicknamed Reg. E by the bankers, and they hate it.

That's because you can opt into a system that will take money out of their pockets -- and keep it in yours.


Centered around Electronic Fund Transfers, there are three major ways you can save with Reg. E:

1. Debit Purchases. By opting into Reg. E, you are telling your bank that any point of sale purchases you make (at the grocery store, the gas station, etc.) should not exceed the amount of money in your account. If you try to go over your balance, your card will be denied.

Why It's Bad for the Bank: Currently customers who use their debit card need to keep track of their balances on their own -- and when a customer overdraws, the bank can charge them a pretty penny in fees.

Why It's Good for You: You can save yourself fees, and you also keep your spending in check.

2. ATM Withdrawals. By opting into Reg. E, you tell the bank to cut off ATM withdrawals when you reach the end of your funds in the bank.

Why It's Bad for the Bank: If you currently overdraw your account via an ATM withdrawal, the bank can charge you a fee.

Why It's Good for You: You save yourself the fees.

The Drawback: No more emergency withdrawals. Bank closed for the weekend, and you have no way of cashing your check until Monday and your car has been towed? If you've opted into Reg E., you can't make an emergency run to the ATM to withdraw the money.

3. ATM Fees. Before you try to withdraw money from a random ATM, you'll have to be told exactly how large the fee is that could come with your withdrawal.

Why It's Bad for Banks: They have to retrofit their current ATMs to reflect the amount, and they can't hide a big fee from you.

Why It's Good for You: No more $5 fee on a $20 withdrawal.

Reg E. has a host of other changes that will go into effect for existing accounts on August 15 (it's already in effect for new ones). You can learn more from the Federal Reserve.


Image via AMagill/Flickr

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