Some industry executives, however, said that the restrictions were too harsh and would have a significant impact on consumers by limiting the availability of credit just when it was needed most.

“I would suspect that many community banks will simply stop offering overdraft protection to avoid the costs and penalties of complying with the rule,” said Camden R. Fine, president of the Independent Community Bankers of America, which represents about 5,000 financial institutions. “If that happens, it will not be the banks that suffer as much as it will be the consumers and small businesses that have taken bounce protection for granted. In many ways this rule and proposals in Congress turn back the clock 25 years and deny a service that was demanded by the consumers in the first place.”

Fed officials said that the banking industry received $25 billion to $38 billion a year in overdraft fees, including fees for checks and electronic transactions not covered by the new rules.

Other Fed rules in the last two years have been directed at predatory loans, abusive mortgage practices, opaque home equity loans and misleading information about credit cards. Some of the credit card rules were superseded by legislation signed this year by President Obama that requires the card companies to give notice before raising rates and makes it more difficult for them to market cards to students.

The Fed announcement was endorsed by senior Democratic lawmakers who also urged the agency to do more.

“Giving customers the chance to choose whether they want overdraft protection is important, but we need to do far more to protect customers from abusive bank products,” said Senator Christopher J. Dodd, Democrat of Connecticut. “We still need to stop the excessive fees, repeated charges, lax notification, and processing manipulation that have become standard in these so-called overdraft protection programs.”

Last month Mr. Dodd, chairman of the Senate Banking Committee, and Senator Charles E. Schumer, Democrat of New York, introduced legislation to limit the number of overdraft fees to one a month and to require a bank to seek permission from consumers to cover debit card and check purchases that would push their bank balance below zero.