Biden Admin Seeks , to Reduce Bank Overdraft Fees , With New Proposal.
CNBC reports that the Consumer Financial Protection
Bureau (CFPB) has unveiled long-awaited updates to how
major banks structure their overdraft protection plans. .
CNBC reports that the Consumer Financial Protection
Bureau (CFPB) has unveiled long-awaited updates to how
major banks structure their overdraft protection plans. .
According to the CFPB, the new rule closes a loophole
that has exempted overdraft loans from consumer
protections required by 1968's Truth and Lending Act.
According to the CFPB, the new rule closes a loophole
that has exempted overdraft loans from consumer
protections required by 1968's Truth and Lending Act.
CFPB data shows that U.S. consumers
have paid an estimated $280 billion
in bank overdraft fees since 2000.
Over that same period of time, major banks'
annual revenue from overdraft fees has soared.
For too long, some banks have
charged exorbitant overdraft fees—
sometimes $30 or more—that often
hit the most vulnerable Americans
the hardest, all while banks
pad their bottom lines, Joe Biden, President of the United States, via CNBC.
Banks call it a service —
I call it exploitation, Joe Biden, President of the United States, via CNBC.
The CFPB said that the new regulations only
affect banks with over $10 billion in assets,
impacting about 175 institutions across the country.
The new rules, including several potential benchmark rates
ranging from $3 to $14 per transaction, are reportedly expected
to be completed this year and go into effect by October 2025.
CNBC reports that the new rules would provide major banks two
options, including offering overdraft coverage as a courtesy
service, as opposed to a revenue-generating line of credit.
Under the second option, banks could offer
overdraft loans for profit as long as they treat
the funds as credit line loans, which would
subject them to Truth in Lending Act regulations