The cost to overdraw a bank account could drop to as little as $3 under a proposal announced by the White House, the latest effort by the Biden administration to combat fees it says pose an unnecessary burden on American consumers, particularly those living paycheck to paycheck.
The change could potentially eliminate billions of dollars in fee revenue for the nation’s biggest banks, which were gearing up for a battle even before Wednesday’s announcement. Exactly how much revenue depends on which version of the new regulation is adopted.
Banks charge a customer an overdraft fee if their bank account balance falls below zero. Overdraft started as a courtesy offered to some customers when paper checks used to take days to clear, but proliferated thanks to the growing popularity of debit cards.
The President can just do that?
What the hell are these other guys been doing for the last few decades?
Without trying to turn this into a political discussion, the reason the Biden administration can do this is because of work the large majority of Congressional and Senate Democrats (and only 3 Republican Senators) did with the Obama administration passing the “Dodd–Frank Wall Street Reform and Consumer Protection Act” in 2010.
One of the things that law did was create a new part of US Government called the Consumer Protection Financial Bureau (CPFB). This bureau did a bunch of stuff you likely enjoy today.
So the Biden Administration is able to work with the now-existing CPFB to put in place these great protections for consumers
Thanks Obama