politics

Article with more info here

Under the proposal, a bank would be allowed to charge consumers its actual cost to cover an overdrawn account, or conform to a set limit determined by the CFPB, effectively eliminating the $35 fees typically charged for an overdraft, according to the agency. Banks take in about $9 billion a year from the fees, according to the CFPB.

Presumably "actual cost" means the literal mechanical requirements for the system e.g. the electricity and server power to detect the overdraft and send the credit. I can't imagine that being very much at all, in the neighborhood of a couple cents. Conveniently, I can't find any data on this—any search involving "overdraft" and "cost" gives me SEO vomit about what the banks charge, not what it costs them.

Rather than provide the CFPB with a breakdown of the costs, banks could instead opt to adopt a benchmark fee, with regulators suggesting $3, $6, $7 and $14 as possibilities. The agency plans to solicit industry and public comments by April 1, with a regulation expected to take effect in October 2025.

1. So Brandon's okay with exploitation (charging hundreds times more than the actual of cost the service) as long as it's not over a certain arbitrary threshold to start. Because you just know the banks are gonna weasel that back up to $25 or something like that.

2. Based on that last sentence, it sounds like the agency can do whatever it wants here, except...

Banks are expected to fight the proposed restrictions, with a massive lobbying campaign in the works. And whatever rule is adopted in nearly certain to be challenged in court.

Can't wait for these regulators to get bribed. Or failing that, for unelected jerkoffs to decide it's illegal not to exploit people, actually.

Banks could also provide small lines of credit to allow customers to overdraw their accounts, a service that would operate like a credit card. Some lenders like Truist Bank currently offer that type of service.

Honedtly that seems fine! You don't get charged $35 for a $2 overdraft, and it's consistent with the bank's other service of loaning money for interest.