Joe Biden Plans To Slash Bank Overdraft Fees To As Little As $3
www.huffpost.com
“Banks call it a service,” the president said. “I call it exploitation.”

“Banks call it a service,” the president said. “I call it exploitation.”

The Biden administration unveiled a new rule Wednesday aimed at slashing bank overdraft fees to as low as $3, a move the president said would help end abusive practices by financial institutions.

Under the proposal, banks could continue to charge fees when a customer’s account falls below zero, but either at a price in line with the bank’s actual costs to administer the overdraft or at an established benchmark created by the new rule.

The Consumer Financial Protection Bureau (CFPB) proposed potential fees of $3, $6, $7 or $14 and is seeking feedback from banks and the public on what would be appropriate. Current overdraft fees often push $30 or more, taking a significant bite out of low-income accounts.

  • Flying Squid@lemmy.world
    28·
    6 months ago

    This is a huge fucking problem and this will be a huge help. Don’t let the perfect be the enemy of the good.

    Households frequently incurring overdraft and NSF fees are more likely to struggle to meet their financial obligations: Among households that frequently incurred overdraft/NSF fees, 81% reported difficulty paying a bill at least once in the past year. This drops to 25% for households that were not charged a fee.

    Low-income households are hit the hardest Overdraft and NSF fees: While just 10% of households with over $175,000 in income were charged an overdraft or an NSF fee in the previous year, the share is three times higher (34%) among households making less than $65,000.

    https://www.consumerfinance.gov/about-us/newsroom/cfpb-issues-report-showing-many-americans-are-surprised-by-overdraft-fees/

    Helping poor people is always a good thing.