Posted on 01/18/2024 8:25:08 AM PST by SeekAndFind
The Consumer Financial Protection Bureau is pushing to reduce the overdraft fees Americans are charged at banks and credit unions when they don’t have enough money in their accounts to cover spending, which could save customers $3.5 billion a year, the latest in a string of crackdowns on fees by the Biden Administration.
If banks choose the flat fee option, that fee would be based on an established benchmark, the CFPB said, noting the agency still has to decide which benchmark—$3, $6, $7 or $14—it thinks is the appropriate amount.
The new rule would apply to institutions with more than $10 billion in assets—which includes some 175 banks and credit unions in the U.S, according to the CFPB.
The agency says the rule would close a loophole that has exempted overdraft loans from consumer protections required by the Truth in Lending Act.
Overdraft loans initially got “special treatment” to make it “easier for banks to cover paper checks” often sent through the mail, CFPB Director Rohit Chopra said, adding that the banks have turned overdrafts into a “massive junk free harvesting machine.”
The CFPB also noted overdraft fees are often $35, even though most consumers’ debit card overdrafts are for less than $26 and are repaid within three days.
(Excerpt) Read more at msn.com ...
What they should limit is credit card companies charging a percentage for a transaction. The transaction costs them the same no matter the amount.
This would be less of a problem if Buy Dung and his cronies hadn’t shoved the US economy into the dumpster.
Math is racist.
That is why blacks are harmed more by overdraft fees (per capita) than white folks....
When I worked at a small bank I was put in charge of the small ATMs that were put into convenience stores and grocery stores. I had to take a crash course in how those systems worked.
After a few weeks, I went back to my boss and asked, “How are the fees that we charge on these things legal…and why doesn’t the mafia control them?
He laughed and said, “No you are getting it.”
Biden was installed in the Senate 45 years ago by the Bank of Delaware at that time they were the largest issuer of credit cards in the US with BankAmericard before Visa and Mastercard came out. Biden’s only purpose in the Senate was to push whatever banking legislation was written by the bank. The Bank of Delaware made Billions off of fees and penalties passed by Biden and his Democrat cronies penalizing credit card customers. The Bank of Delaware also supports the University of Delaware with those Billions in profit and the University is where Joe Biden’s Senate papers are held under seal never to be released. Biden has been a fool and a crook for his entire career. It’s time to go Joe !n
Therefore this is unnecessary and will not help those who are unable to spend responsibly.
The difference between you and millions of others seems to be your bank.
Oops. HTML error on my part.
I had a summer job at a bank some 40 years ago as a phone notifier. This was back in the days when Rolodexes were the primary office assistant. There were flags on the cards to have the supervisor call VIPs if the account was seriously delinquent. Lots of VIPs had issues paying their bills on time..
Those were the private bankers. The crap they had to do for high value customers is amazing. Those folks bounced checks because they forgot where all their money was.
The people I talked to didn’t have to look far for their money.
And…we had empowered our folks to accommodate good customers who made a mistake. But we could look at the accounts and know that how often the customer had been given a break.
The agents would really get angry if the customer kept coming back to the well for handouts.
It took a few weekly phone calls to cough it up if my memory serves me correctly....
That doesn’t conflict or contradict what I posted. My suggestion was, if the government has such a problem with charging this fee for folks who write bad checks - then let the banks just go back to bouncing/returning them instead (which STILL incurs a fee similar to the overdraft fee - but they (consumers) get hit on BOTH ends, plus the prospect of criminal charges for hot checks.
The number of “hot checks” has dramatically fallen in the last few years with the shift (including a push by regulators) to move to overdrafts vs. bouncing checks. Banks were ok - because mostly they made money. But if they can only charge a few $, then let them return the checks. they still get paid without the added risk of not collecting the overdraft amount... and let the courts and the original recipient deal with collecting.
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