CFPB announces rule limiting bank overdraft fees
From CNBC: 2024-12-12 07:35:37
The Consumer Financial Protection Bureau announced a final rule limiting banks’ ability to charge overdraft fees, potentially saving American consumers $5 billion annually. The rule allows banks to charge $5 for overdrafts or limit fees to cover costs, with a disclosed interest rate. The rule takes effect Oct. 1, 2025.
CFPB Director Rohit Chopra stated, “The CFPB is cracking down on excessive junk fees and requiring big banks to disclose interest rates on overdraft loans.” The rule faces opposition from U.S. banking groups, with its fate uncertain amidst industry pushback. Bank lobbying groups argue the rule could limit access to overdraft services.
The Biden administration’s efforts to rein in banking activity include a rule capping credit card late fees at $8 per incident. However, the fate of the overdraft rule is unclear, especially with the election of Donald Trump and the potential appointment of a new CFPB head unsupportive of Biden-era regulations. Bank lobbying groups are exploring options to oppose the rule.