The Senate banking committee published draft legislation on overdrafts on Monday that would severely limit banks’ ability to charge fees, in a move that would help consumers but hit the industry’s profits.

Fees would have to be “proportional” to the cost of processing an overdraft and would be limited to one a month and six a year, according to the plan. Monday’s published draft legislation, sponsored by Chris Dodd, chairman of the committee, would also stop institutions from “manipulating the order in which they post transactions”; “require customers be notified ... by e-mail, text, or traditional mail” when they go overdrawn; and require banks to tell customers at a cash machine or in a branch if a transaction would make their account overdrawn.