The cost to overdraw a bank account could drop to as little as $3 under a proposal announced by the White House, the latest effort by the Biden administration to combat fees it says pose an unnecessary burden on American consumers, particularly those living paycheck to paycheck.
The change could potentially eliminate billions of dollars in fee revenue for the nation’s biggest banks, which were gearing up for a battle even before Wednesday’s announcement. Exactly how much revenue depends on which version of the new regulation is adopted.
Banks charge a customer an overdraft fee if their bank account balance falls below zero. Overdraft started as a courtesy offered to some customers when paper checks used to take days to clear, but proliferated thanks to the growing popularity of debit cards.
Brazil, 20 years ago, I was a student on a shoestring budget. I set my debit card so that I’d get an SMS after any purchase so I’d be on top of things in case shenanigans happened. I go to the small grocer on the corner, slide my card and type my pin. Before I can put my wallet back in my pocket, my phone dings. My bank was telling me where I purchased, when, how much it was, and how much was left in my account.
Are you telling me first world banks can’t do this today? Is it Brazil that’s so ahead technologically or is it greed preventing the banks from getting such a basic system in place?