Overdraft fees would be slashed under new Biden administration rule

The federal Consumer Financial Protection Bureau finalized a rule that could significantly reduce overdraft fees starting October 1, 2023, potentially saving consumers up to $5 billion annually. Large banks and credit unions will have options to set fees, including charging based on service costs, a flat $5 fee, or a profitable amount with full disclosure. The rule aims to address predatory fees that disproportionately impact low-income consumers living paycheck to paycheck, with less than 10% of consumers responsible for nearly 80% of fees, according to the CFPB.

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