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