The U.S. government's latest crackdown on banks could put more money in your pocket

The U.S. authorities is gearing as much as sort out shock overdraft charges at banks as quickly as subsequent month, based on a report from Bloomberg. The Consumer Financial Protection Bureau claims that banks have garnered roughly $8.5 billion from inadequate fund and low-balance charges in 2021, and the company has reportedly been creating laws for the previous few months to crack down on the problem.

The effort is a part of the Biden administration’s crackdown on “junk fees,” an initiative the president introduced in October. The effort goals to get rid of shock charges that customers typically face whereas buying live performance and airline tickets, meals takeout orders, and extra, which value shoppers tens of billions of {dollars} yearly.

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“Folks are tired of being taken advantage of and being played for suckers,” stated President Joe Biden in remarks on the White House on Oct. 11.

Banks normally cost overdraft charges when a cost or withdrawal from a checking account is bigger than the out there steadiness. Fees can vary from round $30 to $35, which might put a burden on shoppers financially. 

After going through immense stress from shoppers, monetary regulators and the federal government relating to overdraft charges, banks have not too long ago been pulling again from charging them. Last 12 months, banks collected roughly $9.9 billion in overdraft charges, a 6% lower from what it collected in 2021, which was $10.6 billion, based on a latest Financial Health Network survey.

The survey additionally reveals that banks have modified their overdraft insurance policies for the previous two years. Financial establishments have been “reducing the size of the fee charged, lowering the cap on the maximum number of fees per day, instituting a grace period, or increasing the minimum negative balance amount to incur a fee.” It even states that some have even eliminated overdraft charges altogether.

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