WASHINGTON (CNNMoney.com) -- A new battle is brewing in Congress, riding the same populist wave that pitted banks against consumers on credit card fees earlier this year.

Momentum is gaining behind a proposed crack down on overdraft fees -- the big penalties banks charge when customers spend more than they have in their accounts.

More than 75% of banks automatically sign customers up for overdraft programs, according to a study by the Federal Deposit Insurance Corp.

One of the big complaints is that many consumers only discover they have overdraft protection when they check their bank statement. Then it's too late. Suddenly a $3 latte costs an extra $35.

"It's extremely frustrating," said Phyllis Blanton, who lives near Wichita, Kan.

Blanton said she recently had to straighten out some $150 in overdraft fees at her local bank, accidentally incurred by her 20-year-old daughter, a college student. "I know the banks are getting stricter and more creative in the ways they're making money, but they're really just socking it to you," she said.

On Capitol Hill, lawmakers are working on bills that would force banks to curb and better disclose those fees. FDIC chief Sheila Bair has lately become a more vocal critic of overdraft fees, calling them "usurious" during a speech last month.

Separately, the Federal Reserve is working on new rules, which could be ready by year's end, to prevent banks from automatically enrolling customers in overdraft protection programs without their knowledge.

Increased criticism on overdraft fees has coincided with a move by banks to voluntarily cut back and change the way they charge overdraft fees.

Some banks are eliminating fees on customers who dip below their balance by a mere $5 or $10. Others plan to cap the number of overdrafts that can be racked up in a day.

Bank of America (BAC, Fortune 500), for example, will on Oct. 19 start charging customers no more than four overdraft fees daily. The current cap is 10.

JPMorgan Chase (JPM, Fortune 500) will start processing and clearing expenses in the order purchases were made, chronologically, instead of biggest to smallest, which can deplete bank accounts faster and lead to more fees.

Consumer advocates say the push in Washington to do something about overdraft fees prompted banks to make changes.

"They clearly know something is coming," said Melissa Koide of the New America Foundation, a left-leaning Washington policy group. "It's a very big populist issue so these big banks and the regional ones are reacting in anticipation, and that isn't a bad thing."

Banks say they're just responding to customer demands and market forces. Other banks that recently announced changes include: BB&T (BBT, Fortune 500), City National (CYN), Fifth-Third Bancorp (FITB, Fortune 500), PNC (PNC, Fortune 500), Regions Financial (RF, Fortune 500), Toronto-Dominion (TD), U.S. Bancorp (USB, Fortune 500) and Wells Fargo (WFC, Fortune 500).

The American Bankers Association says the industry is taking action for a small pool of customers, since most don't pay overdraft fees. A September ABA survey found that 17% of customers said they paid an overdraft fee in the previous 12 months and those that did said they were glad the transaction was covered.

"During tough economic times, when people have tapped all their other sources of credit, when they have to pay for gas or groceries, they really need that payment to go through," ABA spokeswoman Carol Kaplan said.

For banks, overdraft fees are a big revenue generator because so many people rely on debit cards. Some 75 out of 100 financial transactions are electronic, according to Moebs Services Inc., an economic research firm.

The financial services industry is on track to make $38.5 billion this year on overdraft and non-sufficient fund fees, up 38% from $27.9 billion five years ago, Moebs estimates.

A Center for Responsible Lending study released on Tuesday showed that overdraft fee income grew for banks and credit unions by 35% just between 2006 and 2008.

Mike Moebs, who owns Moebs Services, said the changes that banks have made so far will help consumers, but "we need a second step. ... We need to reduce the price of overdraft fees."

That's where the debate on Capitol Hill could get messy.

Rep. Carolyn Maloney, D-N.Y., has introduced a bill that would require all banks to allow customers to agree to participate in overdraft protection.

The bill would also force banks to tell customers when an account is on the verge of being overdrawn, so customers can make a decision whether a particular purchase is worth an overdraft fee. The legislation would also force banks to clear transactions chronologically, instead of biggest first.

Finally, Maloney's bill would force banks to make sure customers' account balances reflect what they actually have available. Some banks show an available balance reflecting both the customer's actual balance plus what's available through overdraft protection, giving a distorted view of what's available for purchases without fees.

Senate Banking Committee Chairman Chris Dodd, D-Conn., is drafting a bill that consumer advocates and congressional staffers predict will be even more aggressive. It could cap fees and the number of times fees can be charged daily. It could require banks to alert customers to their available balances each day.

But financial industry lobbyists say congressional action isn't needed. They argue that the industry's moves have already started trickling through the entire banking system to regional banks.

"Competition and customer concerns about overdraft fees forced the industry to respond -- that's the way it should work," said Scott Talbott, chief lobbyist for the Financial Roundtable, a banking industry group.

Veteran Hill watchers say they expect Congress to address overdraft fees -- and definitely before the 2010 elections next fall.

Current legislation is stuck behind bigger, more-pressing priorities.

Maloney's bill has yet to be considered by the House Financial Services Committee, which is slammed with hearings on overall financial regulatory reform. In the Senate, bogged down by health care reform, Dodd's bill is expected to be released in coming weeks.

That's not soon enough for bank customers like Phyllis Blanton, the Kansan who said she recently got buried in fees.

A tanning salon accidentally charged her daughter Ashley $70 instead of $7. The transaction was immediately voided but Phyllis' account, which is linked to Ashley's, had become overdrawn.

The bank, Intrust Bank, didn't clear the voided transaction for a few days, so her daughter's account remained overdrawn. Her daughter went on to rack up fees on a $2.50 McDonald's Happy Meal and a $3 purchase of school supplies at Wal-Mart.

Total fees: $150 from five different transactions over two hours.

"This is a way for them to trip people up and to be able to hold onto their money," said Phyllis Blanton, who was able to convince her bank of 30 years to drop three of the five overdraft charges.

An Intrust spokeswoman declined to comment on the specific case. She said the bank, before reimbursing customers, typically requires merchants to write a letter explaining voided purchases.

For Blanton, the headache was enough to make her consider shopping for a new bank. "They used to let these things slide, but they don't anymore," she said.