Consumer advocates are calling for changes in the way banks charge for overdraft protection.

Last month, the Federal Reserve made news by approving reforms to credit card practices such as arbitrary rate increases and double-cycle billing. At the same time however, the Fed was also in the process of withdrawing and re-issuing some proposals that govern the overdraft fees consumers can be charged when using their debit cards.

At issue is whether consumers should have the option of having to specifically opt in to an overdraft protection plan and paying the ensuing fees when they do exceed their balance, or whether they should simply be able to opt out after being automatically enrolled in such a program when they open a new account.

"Debit card overdrafts are costing consumers billions of dollars a year. Consumers should have the right to decide whether they want to pay a $35 fee to buy a $5 hamburger," said Eric Halperin of the Center for Responsible Lending in a recent statement.

Halperin's organization cites FDIC statistics showing that a $27 overdraft fee on a $20 debit withdrawal would amount to a 3,520 percent interest rate if paid back within two weeks.

While the Federal Reserve considers the issue, Congresswoman Carolyn Maloney (D-NY) has introduced legislation that would go beyond the currently proposed reforms. Under her bill, consumers would have access to full information on charges associated with their banks' overdraft programs, as well as the right to be notified if a transaction was about to trigger an overdraft charge, giving them a chance to not make the purchase and pay a fee in the process.

For those looking to avoid overdraft charges and late fees, part of your financial strategy may include payday loans.

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