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The Biden Administration is ‘cracking down’ on banks by imposing a $5 cap on overdraft fees, calling them ‘junk fees’ (finance.yahoo.com)

submitted 5 days ago by MicroWave to c/economics

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Summary

The Biden Administration, through the Consumer Financial Protection Bureau (CFPB), is capping overdraft fees at $5, down from $35, starting Oct. 1, 2025.

The move, targeting “junk fees,” could save U.S. consumers $5 billion annually.

The CFPB suggests banks adopt cost-based fees or offer overdraft credit lines while disclosing interest rates.

Industry groups oppose the rule, and its future is uncertain under a Republican-controlled Congress and the incoming Trump administration.

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[–] errer 4 points 5 days ago (1 children)

Credit cards have zero interest if I pay off the balance in full each month. That is not an option for payday loans.

[–] [email protected] 1 points 5 days ago* (last edited 5 days ago)

Yes, thats why low limit credit cards are a better model than payday loans and was my point for both payday loans and overdraft fees.