[ad_1]\n<\/p>\n
The cost of overdrawing a bank account could fall to as little as $3 under a new proposal announced by the White House on Wednesday.<\/p>\n
It comes as the Biden administration looks to tackle fees it says add an unnecessary burden on US consumers, particularly low-income families.<\/p>\n
Officials said the move could save consumers, who can pay as much as $37 everytime they go into negative balance – a total of $3.5 billion a year.<\/p>\n
The Consumer Financial Protection Bureau (CFPB) put forward potential fees of $3, $6, $7 or $14 and is looking to gather feedback from banks and the public on what fees would be appropriate.<\/p>\n
CFPB director Rohit Chopra said in a statement that banks have turned overdraft fees into a cash cow they weren’t created for, with the popularity of debit cards rising significantly over the years.<\/p>\n
READ MORE: Top savings challenges taking TikTok by storm including turning \u00a3200 into \u00a310k<\/strong><\/p>\n<\/div>\n \u201cDecades ago, overdraft loans got special treatment to make it easier for banks to cover paper checks that were often sent through the mail,\u201d Chopra said.<\/p>\n \u201cToday, we are proposing rules to close a longstanding loophole that allowed many large banks to transform overdraft into a massive junk fee harvesting machine.\u201d<\/p>\n President Joe Biden didn’t mince words as he launched a scathing attack on the banks’ use of overdraft fees in a statement.<\/p>\n \u201cBanks call it a service \u2013 I call it exploitation,\u201d he said.<\/p>\n The new rule would apply to around 175 large banks with assets of at least $10 billion. The agency said these banks \u201ctypically\u201d charge an $35 overdraft fee, though most of the debit card transactions involved are for $26 or under and are swiftly paid back.<\/p>\n<\/div>\n<\/div>\n Federal rules of this kind have to go through a public-comment period before being finalized and put into effect, and are often hit with political pushback.<\/p>\n<\/div>\n The proposal could face also legal challenges from the powerful financial services industry.<\/p>\n<\/div>\n As the CFPB acknowledged, overdraft fees have generally been declining in recent years, partly due increased scrutiny from regulators.<\/p>\n Research from the Financial Health Network released in June, showed that overdraft revenue for banks had fallen 6 percent in 2022 compared with the previous year. However, the percentage of households having to pay the fees remained steady.<\/p>\n<\/div>\n<\/div>\n[ad_2]\n","protected":false},"excerpt":{"rendered":" [ad_1] The cost of overdrawing a bank account could fall to as little as $3 under a new proposal announced by the White House on Wednesday. It comes as the Biden administration looks to tackle fees it says add an unnecessary burden on US consumers, particularly low-income families. Officials said the move could save consumers, …<\/p>\n","protected":false},"author":1,"featured_media":21997,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/21996"}],"collection":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/comments?post=21996"}],"version-history":[{"count":0,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/posts\/21996\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media\/21997"}],"wp:attachment":[{"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/media?parent=21996"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/categories?post=21996"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/farratanews.online\/wp-json\/wp\/v2\/tags?post=21996"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}