Biden Administration Could Limit Bank Overdraft Fees To As Little As
The Consumer Financial Protection Bureau is pushing to reduce the overdraft fees Americans are charged at banks and credit unions when they don’t have enough money in their accounts to cover spending, which could save customers $3.5 billion a year, the latest in a string of crackdowns on fees by the Biden Administration.23 million. That’s approximately how many U. S. households pay overdraft fees a year, the CFPB said. If the proposed rule comes to fruition, consumers could save $3.5 billion a year or $150 per household that pays overdraft fees, the independent watchdog agency said. The CFPB said they expect the proposed rule to be finalized this year and go into effect in October 2025.“Banks call it a service—I call it exploitation,” President Joe Biden said in a statement Wednesday. The Consumer Bankers Association—which includes executives from JPMorgan Chase, Wells Fargo and Capital One—called the CFPB’s proposal “misguided” Wednesday and urged the agency to “reexamine the cumulative impact of these regulations.” President Lindsey Johnson called the proposal a “one-size fits-all approach” that would halt innovation and competition, and argued the proposal would push consumers out of the banking system and is one of many “costly regulations” by the Biden Administration. This is one of a handful of efforts the Biden Administration has taken to reign in what it describes as junk fees. Last month, Atlantic Union was ordered to pay $6.2 million by the CFPB after it allegedly misled thousands of customers into enrolling in checking account overdraft programs. In 2022, Regions Bank was ordered to pay $191 million for charging customers illegal surprise overdraft fees on certain debit card purchases and ATM withdrawals. The push extends beyond banks: In October, the Federal Trade Commission proposed banning some businesses from charging surprise fees and requiring businesses to list fees upfront. Among the businesses were sports and concert ticket sellers such as StubHub and Ticketmaster, which sometimes charge service fees, along with AirBnB and VRBO, which impose cleaning and services fees. The proposal also targeted surprise fees sometimes included in hospital bills from out-of-network doctors at in-network hospitals. Biden Wants To Ban 'Junk Fees' — The Hidden Costs Tacked Onto Concert Tickets, Hospital Bills, And More (Forbes)
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Article Link: https://www.forbes.com/sites/anafaguy...
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