Summary
The Biden Administration, through the Consumer Financial Protection Bureau (CFPB), is capping overdraft fees at $5, down from $35, starting Oct. 1, 2025.
The move, targeting “junk fees,” could save U.S. consumers $5 billion annually.
The CFPB suggests banks adopt cost-based fees or offer overdraft credit lines while disclosing interest rates.
Industry groups oppose the rule, and its future is uncertain under a Republican-controlled Congress and the incoming Trump administration.
If they are truly junk fees then the cap should be $0.
This is how progress dies, by half assing everything and blaming it on speculation that it couldn’t work if done right.
I’m 50/50 on that. I agree, but it’s more complicated in action than just saying “the fee is now zero.” This isn’t the first time Biden has tried to get rid of overdraft fees. Courts strike it down.
certainly. nothing happens gradually its always super sudden. half a loaf sucks so bad to. waaayyyy better to have no loaf. at least with no loaf you can imagine how nice the whole loaf will be without that pesky half a loaf bringing you back to reality. Man I am so happy to have 4 years of no loaf and I hope no one ruins it with a bunch of half a loaves 4 years from now. /s
Isn’t the CFPB one of the agencies that conservatives are trying to get rid of?
Waaay back in the 80s I had a US Bank account called “The Only Account”. It was a savings and checking account joined together. The checking account always had a zero balance. When I wrote a check the bank transferred money from savings to checking and paid the check. Why didn’t they just have one account, I wondered? They said it was because federal banking regulations didn’t allow them to pay interest on checking accounts. So they had this nifty workaround. Fine by me! They didn’t charge me anything for each check, just a small monthly account fee which I don’t remember, and I never had to balance my checking account because it never had a balance, or worry about moving money into it. It was perfect!
Flash forward to the 90s when I got married and moved from Portland OR to Seattle. I walked into a US Bank to find out if I had to do anything to move my Only Account to their branch.
“Only Account”? the employee asked. “We don’t have anything like that.”
“Oh yes you do,” I retorted. “Here’s my US Bank checkbook. It says Only Account right on it.”
“Ohhhh… that’s US Bank of Oregon, we’re US Bank of Washington.” At this point she started talking to me like I was in kindergarten. “You see, we’re like cousins - same family but not the same company. We have different rules.”
“That’s interesting,” I said. “The New York Stock Exchange thinks it’s ONE company called US Bank (symbol USB). I’ve personally owned the stock myself.”
After some more mumbling I made her give me back the check I had given her for deposit and the application I had partially filled out, and I just took my money to my wife’s credit union, where we’ve had a joint account ever since.
The point of this story is that banks don’t need to create an overdraft account for you, deposit money into it as a loan when you overdraw a check, charge you interest on the loan, and charge you $15 or whatever for every time they do this. I don’t know if US Bank of Oregon still has the Only Account or if they wised up to the missed profit potential and joined the “Oh I’m sorry we can’t do that” crowd, but the truth is that banks CAN dispense with all the overdraft nonsense, BECAUSE THEY WERE DOING IT 40 YEARS AGO AND IT WORKED GREAT.
You’ll never guess who these fees impact the most.
Great another fee that will be reversed in 3 weeks. How about doing this shit four years ago?
I should not let my bad mood make me post reactionary nonsense without looking into it further.
No you were right, cfpb is under the executive, he could have done this day one.
Only if you ignore the fact that he tried such tactics with the EPA to curb emissions and the courts ruled they didn’t have lawful rights to make those changes without them being directly voted on by Congress. Similar happened with him trying to expand student loans forgiveness with the SAVE act within the department of education. Both of those fall under the executive branch, yet neither got through. Which just goes to show this being under the executive branch does not mean they can get it past the courts unless the conservative judges that blocked those allow it.
Except the court has upheld both qualified immunity and presidential absolute immunity; meaning Biden could order the executive to ignore the court as past presidents have done.
H.R.4277 - Overdraft Protection Act of 2021
He started this in 2021. Remember he had to start his 4 years trying to wrangle inflation going buck wild. The guy’s not the greatest possible president but he has been working towards shit like this for all 4 years. What we should ask is why did it take so long to pass Congress… Because if the effective start date of a bill occurs during their presidency the Republicans can take credit. Kind of like how Trump changed the sentences of those 3000+ people, and then Biden got the blame by Republicans for pardoning the 1500 left as per the agreement written and signed in March 2020.
why did it take so long to pass Congress
H.R.4277 never did pass Congress; it didn’t even make it to a vote in the House. This new policy is coming from the CFPB.
Also Biden did not pardon those 1500; he commuted them to time served.
Yeah the commuting is what was written up in in the Cares act in 2020.
The point of the first part was that he didn’t wait until 2024 to do it… he’s been trying to do it since 2021 and getting road blocked. Why it isn’t getting road blocked now? Well it might be to soon to see… but I suspect it’ll go through now