A majority of Iowans find the overdraft protection programs offered by their banks and credit unions to be beneficial, according to a survey commissioned by the state’s two largest financial services trade associations.

According to the survey, contracted by the Iowa Bankers Association (IBA) and the Iowa Credit Union League (ICUL), nearly 70 percent said that overdraft protection was beneficial to them. And of the 22 percent of respondents who had used overdraft protection in the past 12 months, 94 percent said the overdraft protection was preferable to having the bank return the check or decline payment.

However, only 42 percent said they believe the fees incurred for overdraft protection are “about the right price or a bargain,” compared with 35 percent who said the fees are too high.

Federal regulators and congressional leaders are considering changes designed to limit the amount of overdraft fees that financial institutions can impose when customers overdraw their accounts.

Under a rule recently approved by the Federal Reserve, beginning on July 1 banks and credit unions will be required to receive an affirmative “opt-in” from their customers or members before initiating overdraft protection fees related to automated teller machines and one-time debit transactions.

Legislation introduced in October by Sen. Christopher Dodd (D-Conn.) would limit the number of times that banks could charge consumers overdraft protection fees to once per month and no more than six times per year.

The IBA and ICUL say such legislation would inhibit consumers from receiving the benefits of this service, thereby increasing the number of checks returned by merchants due to insufficient funds and increasing fees on consumers.

“Banks and credit unions urge our customers to manage their money wisely,” said John Sorensen, president and CEO of the Iowa Bankers Association, in a press release “A fully disclosed overdraft protection program can be an effective tool in limiting fees and the hassles associated with infrequent overdrafts and returned checks.”

The survey, conducted on Dec. 1-2, included 501 registered voters from the latest presidential election, balanced by age, gender and political party to reflect a statewide general election turnout, with a margin of error of 4.37 percent.

To view a summary of the survey’s key findings, click here.