Starting this summer, banks won’t be able to charge fees for overdrafted debit transactions without getting customers to agree to an “opt-in” program ahead of time. It’s likely to lead to a drop-off in fee income for banks of all sizes – but the problem is, no one’s sure whether it will be a mild slope or a gaping canyon.

Locally, Dedham Institution for Savings is estimating a 20 percent to 30 percent drop in fee income, said Gerard Lavoie, executive vice president. Not a death-blow to a bank that leans more on interest than fee income, but still, he said, nobody is thrilled about fee income losses – particularly during challenging financial times.

But like other bankers and consultants, Dedham won’t know for sure how much the new regulations will hurt until they take full effect Aug. 15.

For now, the only course of action is to sit back and watch how customers respond to the new requirements, said Wesley Wilhelm, senior analyst with Boston-based banking consultancy firm Aite Group, which released a June report on the subject.

The Big Unknown

Aite surveyed 22 of the 130 U.S. banks with the largest number of checking accounts and found a wide variety of predictions. On average, respondents predicted they’d lose 26 percent of overdraft fee income, but that average belies the enormous range of expectations, Wilhelm said. One bank figured it would lose 5 percent, for instance, while another was bracing for an 80 percent decrease.

Under new regulations, which will take effect for existing account holders Aug. 15 and are already in place for all new bank customers, banks must get customers’ permission to charge fees for overdrafts on their debit card transactions. If customers choose not to participate, charges will simply be denied at the check-out counter or ATM.

Customer behavior on this question is a big unknown for most banks, Wilhelm said: Will customers want to do everything to avoid the embarrassment of having a charge denied, or do they want to avoid extra fees at all costs? Some banks may indeed know their customers very well – different banks court different types of customers, which may account for the wide variety of expectations – but much of this question can only be solved by seeing how customers react.

In the report, many banks said they believed they would make up income by tinkering with charges and fees for other bank services. About half thought they could make up part of the loss by reworking overdraft fees for other accounts, and 36 percent were changing their checking account charges. Regardless, most respondents thought these strategies wouldn’t entirely make up the difference.

For some community banks, losing this chunk of income can amount to a six-figure loss, said Dave Frauenhofer, product manager for Connecticut-based COCC, which works with a number of Massachusetts banks. The banking IT company worked with 130 institutions, ranging from $10 million credit unions to $3 billion banks, to prepare for the summer deadline. COCC also performed revenue reports to spell out the importance of overdraft fees to individual banks’ bottom lines, showing the possibility for major losses.

Fears Overblown?

Still, Frauenhofer is betting that many customers will want to keep overdraft protections. Much of banks’ debit fee income comes from a relatively small percentage of customers who make a habit of overdrafting on their debit purchases or withdrawals. These people are already aware they’re triggering these fees on a regular basis, he said, and are likely to want to continue with the status quo.

Dedham has been working ahead of time to see if customers would like to opt in to the overdraft protection program, and although it was too early to give a definite percentage of “yes” votes, Lavoie said preliminary feedback had been positive.

“That whole process has gone better than expected as far as customer responsiveness,” he said. “Customers who use overdraft privilege – they actually like having it, sort of as a safety valve.”

Strunk & Assoc., a Texas-based company that sells overdraft protection software, reports similar findings on a larger scale. Marc Paine, executive vice president, said banks that work with Strunk & Assoc. are getting 85 percent to 90 percent of customers to accept the fee programs. But, he added, Strunk has always advised its banks to communicate openly with their customers about these programs, including what type of fees they can expect.

That’s made for a smoother transition now that the regulations are kicking in, Paine said.

The Aite Group report, however, polled mostly larger banks that had a less optimistic view. Nearly 30 percent of respondents decided to discontinue this type of overdraft protection at all, figuring that few customers would opt in.

In addition, many banks figured it would be too expensive to comply with the nuances of the regulations, Wilhelm said. For example, the regulations don’t apply to recurring debit card payments, only one-time charges or withdrawals. Many banks’ operating systems had to be altered to differentiate between those transactions.

That expense, in addition to the loss of fee income, placed a financial burden on banks of all sizes, he said. That’s especially tough in an environment where many banks are struggling to keep their capital levels robust.

“Any reductions in income right now are just really hard to take,” he said.