The Biden administration has recently implemented a rule aimed at curbing the excessive overdraft fees that banks can charge consumers. This move is part of President Joe Biden's broader initiative to reduce what he has termed as 'exploitative' fees that burden individuals on everyday transactions, including banking services.
Under the finalized rule, banks now have three options when it comes to overdraft fees. They can opt for a flat fee of $5, charge a fee that covers their costs and losses, or disclose the terms of the overdraft loan, similar to any other loan, typically expressed as an annual percentage rate (APR).
