After July $2010$, bank customers using a debit card had to specifically opt-in to the bank’s overdraft protection plan. Explain the effect of this regulation on a bank’s noninterest income.

Bank Overdraft protection is a choice presented in bank accounts that forestall check, ATM, or debit card transactions, as well as wire and electronic exchanges, from making the record's equilibrium fall under nothing and setting off an overdraft expense or a non-sufficient funds charge.

Banks charge a cost for overdrafts they supply to customers.

So, every moment a person constructs a payment that is more than funds in his checking account, overdraft security as supplied by the bank comes into impact and also shows the setting of a fee on such overdraft.

This facility is automatically being provided by the bank to all checking account holders. However, after July 2010, clients have to opt in to obtain overdraft security from banks. This principle will stop the automatic attachment of this facility by banks. As behavioral economists suggest that conscious preference outcomes in less penetration than automatic selection.

So, this opt-in regulation will result in more irregular account holders handling time out to opt for an overdraft protection program.

With fewer account holders opting for an overdraft protection plan, the exact number of overdraft leaves will also come down.

This will decrease the payments collected by banks from overdraft protection plans. Thus, this rule will reduce the bank's non-interest revenue.