The Trump administration is pushing to reverse a Biden-era rule that limits major banks’ ability to charge customers overdraft fees. The proposal has been backed by the White House and several banking associations, which claim it will help banks manage costs without harming consumers.
Last week, two lawmakers introduced legislation to repeal the rule, which capped overdraft penalties at $5 and gave banks options to minimize losses. In a statement, the Office of Management and Budget Director expressed gratitude for the introduction of the bill, saying it would further President Trump’s deregulatory agenda.
The rule was passed in 2021 and aimed to reduce the financial burden on consumers who accidentally overdraw their accounts. Former Consumer Financial Protection Bureau Director Rohit Chopra estimated that the rule could save consumers up to $5 billion annually.
However, banking associations have opposed the rule, arguing that it would increase costs for consumers. The American Bankers Association sued the Biden administration in December, claiming the CFPB exceeded its authority and harming consumers.
The proposal has been met with criticism from lawmakers, including Sen. Elizabeth Warren, who accused President Trump of undermining the agency’s efforts to reduce costs for working families.
Source: https://www.rollingstone.com/politics/politics-news/trump-admininstration-banks-raise-overdraft-fees-1235271368