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Federal Reserve Bank of Dallas
2200 N. PEARL ST.
DALLAS, TX 75201-2272

October 20, 2004

Notice 04-72

TO: The Chief Executive Officer of each
financial institution and others concerned
in the Eleventh Federal Reserve District

Regulatory Agencies Provide Consumer Information on
Avoiding Overdraft and Bounced-Check Fees
The federal bank, thrift, and credit union regulatory agencies have announced the
publication of a new consumer resource, Protecting Yourself from Overdraft and Bounced-Check
Fees. The brochure’s key message to consumers is that the best way to avoid overdraft and
bounced-check fees is to manage accounts wisely. That means keeping an up-to-date check
register, recording all electronic transactions and automatic bill payments, and monitoring
account balances carefully.
Many banks, savings and loans, and credit unions offer “courtesy overdraft
protection” or “bounce coverage” plans so checks do not bounce and ATM, debit card, and other
electronic or automatic transactions go through. But most financial institutions charge a flat fee
(often $20 to $30) for each item they cover. Even if a financial institution has a bounce-coverage
plan, there is no guarantee an overdraft will be covered.
The federal financial regulatory agencies want consumers to know that careful
account management is the lowest-cost way to avoid overdraft and returned-check fees and
protect your hard-earned money. If overdraft protection is needed every now and then,
consumers should talk with their financial institution or a financial adviser about what choices
and services are right for them. Financial institutions may provide other ways of covering

For additional copies, bankers and others are encouraged to use one of the following toll-free numbers in contacting the Federal
Reserve Bank of Dallas: Dallas Office (800) 333-4460; El Paso Branch Intrastate (800) 592-1631, Interstate (800) 351-1012;
Houston Branch Intrastate (800) 392-4162, Interstate (800) 221-0363; San Antonio Branch Intrastate (800) 292-5810.


overdrafts that may be less expensive. For example, consumers may be able to link a savings or
other account to automatically transfer funds into their checking account. Consumers also may
be able to establish an overdraft line of credit or link a checking account to a credit card.
The interagency information is available on the Board’s web site at A PDF (Portable Document Format)
version is provided on the web site so that consumer groups, financial institutions, agencies and
other organizations can download and print copies for distribution to their clients and customers.
It includes a space on the back panel for organizations to provide their own contact information.
Single copies of the brochure are also available free of charge from Publications, Mail
Stop 127, Federal Reserve Board, 20th and C Streets, N.W., Washington, D.C. 20551; 202-4523245.
Paper copies of this notice or previous Federal Reserve Bank notices can be printed
from our web site at