GOOD NEWS -Overdraft fees could drop to as low as $3 under new Biden proposal

If you've ever accidentally overdrawn your checking account, and don't have a protection plan in place- like an automatic transfer from your savings account,  then you know Bank Overdraft fees can be Expensive!! Typically, large banks charge $35 per transaction in the event of an overdraft. Based on research conducted by the Consumer Financial Protection Bureau, the average U.S. consumer pays over $250 annually on overdraft fees. NOW, the Biden Administration is trying to Cut those Overdraft Fees! Here's the story from the Associated Press.

Overdraft fees could drop to as low as $3 under new Biden proposal 

Associated Press, Jan 18, 2024

The cost to overdraw a bank account could drop 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. Read more.

Why this matters:

Overdraft fees have been a financial bonanza for the banking industry, with the Consumer Financial Protection Bureau estimating that banks collected $280 billion from the fees in the last 20 years. The banking industry is expected to fight the new regulation vigorously to protect the fee revenue.

CFPB research has shown that overdraft fees overwhelmingly impact the poor and households of color. Biden has made the elimination of “junk fees” one of the cornerstones of his administration’s economic agenda, while banks have argued that government regulations on overdrafts could cause them to eliminate the service altogether.