The US House has voted to overturn a rule that would have limited bank overdraft fees to $5, sending it to President Donald Trump’s desk for signature. Republicans argued that the regulation would force banks to stop offering overdraft protection and make it harder for consumers to access credit. The Biden administration estimated the rule could save consumers billions of dollars annually.
The rule was part of a broader effort by the Biden administration to reduce fees on everyday purchases, including banking services. However, Democrats strongly opposed the move, saying it would help consumers who struggle with overdraft fees. Critics argue that the fees can be excessive, especially for low-income households.
Banks and credit unions that comply with the rule would have been able to charge a flat fee of $5 or one that covered their costs and losses. The rule applied to banks and credit unions with over $10 billion in assets, including major financial institutions.
The move reverses a trend of increasing overdraft fees, which originated in the 2000s when consumers wrote more checks. Critics argue that the fees can be exploitative, especially for vulnerable customers who are struggling financially.
Source: https://apnews.com/article/overdraft-fees-bank-vote-house-senate-cra-8849f082f0f63e23d66602b8be90c653