Years ago when I was living in the Washington, DC metropolitan region, it

seemed very suddenly that a particular coffee shop chain began placing a

coffee shop on every corner. These shops were ubiquitous and, like

mushrooms, new shops appeared outside the building where I worked in

Alexandria, VA. I and my co-workers were surrounded, and because so we

patronized these establishments. We jokingly began to refer to them as

"Fourbucks" because every time we went there, a container of coffee cost

about four dollars. I mention this because on August 15, 2010, a new

banking law that covers overdraft protection for your ATM transactions

and every day debit card transactions (grocery store, coffee shop, gas

station, etc.) is going into effect. For you to have this protection you must

elect to opt-in for this coverage or you will not receive it. The opt-in is not

required to retain your current overdraft protection for your paper checks

or recurring debit card transactions (check with your bank if unsure). I like

to refer to this new law as the "Fourbuck rule".

An example made by the proponents of this new bill and hyped by the press is the $38 cup of coffee: a man

in Spokane, Washington went to a coffee shop similar to the ones I refer to above and paid for this coffee

with his debit card. He did not know that this four dollar cup of coffee would overdraw his debit account,

and when it did, he was charged with a $34 overdraft fee. Essentially he paid $38 for a cup of coffee. He

claimed that he did not know that he had overdraft protection, and this may be true. When you sign up for

these programs, banks typically offer this protection as a customer service item as part of the program. If

you stop to think about it, the bank is providing you with a loan to cover the deficiency in your account.

Banks say this is a service to their customers, proponents of the new "Fourbuck rule" claim the banks do this

because banks make hefty fees. The proponents of the bill claim that having the electronic transaction that

overdraws the debit account is different than writing paper checks and you are less prone to the overdraft

fees with checks. Maybe, but in this case, if a $4 cup of coffee overdraws your account, you likely have no

idea of the balance of the account (which is your responsibility) and are likely living on a financial edge. It

would be one thing to use the debit card for a $200 transaction and have it overdrawn by $4, than to conduct

a $4 dollar transaction and have it overdrawn.

In many ways I think that the Fourbuck rule is symptomatic of modern life styles. Electronic transaction

happen quickly and without your participation, making it easy (and getting frequent flyer miles), and you

don't need to have the money in your bank account since the credit card company will give you a loan. And

once these occur, trying to get them undone is almost impossible-I know, I have one with an internet service

provider that is yet unresolved after two years.

As for the Fourbuck rule, I am opting-in. Call me old school, anal or "too banker", but I always have a

sufficient balance in my debit card account to cover a $4 cup of coffee, and would prefer not to be

embarrassed if I did not.