Consumer Banking and Payments Law: 5.8.2.1 Introduction
If an electronic fund transfer is presented against an account that does not have sufficient funds to cover the transfer, the financial institution may nonetheless honor the transfer but impose an overdraft fee. As with checks that would otherwise bounce, institutions may honor a payment despite insufficient funds when a preauthorized electronic payment is presented against an account (either through the ACH system or through a preauthorized debit card transaction) or when the consumer uses a debit or ATM card directly.