Banks push to save overdraft fees

NEW YORK, Feb. 23 (UPI) -- U.S. banking consultants are warning banks to accelerate efforts to market overdraft services or risk losing billions of dollars in penalty fees.

"Your fee income will take a substantial 'hit' if you don't start getting consumers to 'opt-in' for … overdrafts NOW!" reads a warning on a Strunk & Associates Web site, The New York Times reported Tuesday.

Another financial consultant, Eric Wittekiend at Raddon Financial Group said he favored "an aggressive opt-in strategy to protect as much revenue as possible."

At risk is billions of dollars banks collect on fees for overdrawn accounts. As of August 15, the Federal Reserve will require banks to have debit card customers chose the service, rather than allow banks to assume it can cover an overdraft for a customer and slap on a lucrative fee.

Banks have already begun aggressive sales pitches. A mailing from Chase tells customers "your debit card may not work the same way anymore," if they don't permit the bank to cover their overdrafts.

In 2009, banks collected $38.5 billion in overdraft fees, including $20.2 billion in fees for overdrawn debit cards, the Times said.