A new California law aims to protect consumers from “junk fees” for declined ATM withdrawals starting January 1, 2025. The law prohibits state-chartered banks from charging fees for instantaneously declined withdrawals.
Consumer advocacy groups welcomed the bill, calling insufficient fund penalties “junk fees” that can be difficult for financially vulnerable consumers to pay. Governor Gavin Newsom signed the law alongside other bills limiting credit union overdraft fees and regulating subscription renewals.
The law applies to banks and credit unions regulated by the state and takes effect on January 1, 2025. It aims to prevent “fee creep” in the banking industry. The Consumer Federation of America estimates that common charges for insufficient funds can be $30 or more.
This new law is similar to a rule applied by the Consumer Protection Financial Bureau to federally chartered banks. Governor Newsom also signed other bills addressing overdraft fees and subscription renewals, which will come into effect on July 1 and January 1, respectively.
Source: https://gvwire.com/2024/12/25/california-limits-junk-fees-new-law-blocks-fines-for-declined-atm-withdrawals