Uncle Joe Brandon to limit overdraft fees
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This is good news, at least until John Roberts decides that it would be unconstitutional for the CFPB to issue regulations under a Democratic administration:
The U.S. government on Wednesday proposed to limit bank overdraft fees, which companies can charge customers who spend more money than they have available in their accounts, touching off a fierce fight with financial giants eager to preserve their profits from federal regulation.
The new draft rules, unveiled by the Consumer Financial Protection Bureau, could cap some of the charges as low as $3, part of a suite of potential changes meant to aid low-income Americans who are most at risk of racking up substantial debts.
Generally, overdraft payment programs function as a kind of loan: If a customer spends more money than they have, they can elect for the bank to process the transaction anyway. If they do, consumers must pay back the remainder they owe, plus a fee, which averages about $26 per overage nationally, according to Bankrate, a publication that tracks the industry.
The exact mechanics vary by bank and program, but the fees historically have fallen the hardest on poor Americans while enriching major banks. In 2022, overdraft charges generated nearly $9 billion in revenue for the industry, according to data furnished this week by the CFPB, which has repeatedly punished banks for imposing excessive penalties to boost their profits.
Under the agency’s new draft proposal, banks would be subject to tough credit card-like regulations on their overdraft programs, unless they agree to lower fees on customers. The charges would be capped, either to the amount necessary for a bank to cover its losses, or to a federal maximum, which may be set between $3 and $14.
Exactly what the CFPB was designed to do, which is exactly why Republicans and their financial backers hate it.
While we’re here, I present without further comment one of the most amazing examples of “refusing to take ‘yes’ for an answer” that I’ve ever seen:
He was literally nominated by Biden and confirmed by Senate Democrats what are we even doing here. https://t.co/x0cNLqxdbW— Brian Schatz (@brianschatz) January 19, 2024
…via John Revolt in comments, there’s also this:
The Biden administration announced Friday it would forgive $4.9 billion in student debt for 73,600 borrowers.
The relief is a result of the U.S. Department of Education’s fixes to its income-driven repayment plans and Public Service Loan Forgiveness program.
“The Biden-Harris Administration has worked relentlessly to fix our country’s broken student loan system and address the needless hurdles and administrative inaccuracies that, in the past, kept borrowers from getting the student debt forgiveness they deserved,” U.S. Secretary of Education Miguel Cardona said in a statement.