According to information from the White House, overdraft and insufficient funds fees left a $15.5 billion spill for banks in 2019
If you have ever paid overdraft fees, and moreover, it has happened to you several times, those days may come to an end, after President Joe Biden announced that extra fees will be eliminated for several items of contracting and banking services. , such as overdraft fees on bank accounts, credit cards or bad checks.
“Unexpected bank overdraft fees, excessive credit card late fees, hidden hotel booking fees, or those huge fees because they keep people from switching from cable and internet plans to a better deal. Surprise charges that companies sneak into bills because they can,” the White House said in a statement.
Along these same lines is the CFPB, the Consumer Financial Protection Bureau, which issued a guide on practices that are “probably unfair and illegal under existing law,” according to a press release.
And one of these first situations has to do with overdraft fees, which are charged to consumers when they do not have enough funds in their account to cover a charge.
“Americans are willing to pay for legitimate services at a competitive price, but are frustrated when they receive junk fees for unexpected or unwanted services that have no value to them,” CFPB Director Rohit Chopra said in a statement. of press.
“We are providing guidance on existing law that will help law-abiding businesses looking to compete fairly and the families they serve,” he added.
According to the CFPB, overdraft and depositor fees are likely to violate the Consumer Financial Protection Act’s prohibition on unfair practices when consumers cannot reasonably avoid them.
That is why, through the guide they have issued, they seek to give guidance to the final consumer, so that they know when they are allowed to be charged overdraft fees and when they are not.
With this guide, people can learn what charges companies can make, something the White House says could eliminate billions of dollars in bank fees each year.
“These are garbage rates. They are unfair and hurt marginalized Americans the most, especially low-income and minority people,” Biden added.
According to a White House estimate, overdraft and insufficient funds fees accounted for an estimated $15.5 billion in revenue for banks in 2019.