A new state law in California will eliminate overdraft bank fees at state-regulated banks starting January 1, 2024. The law, Assembly Bill 2017, aims to protect consumers from incurring fees when withdrawals are declined due to insufficient funds.
A new state law will eliminate overdraft bank fees at state-regulated banks starting Jan. 1. Assembly Bill 2017 aims to protect consumers from paying a fee when withdrawals are declined immediately, like at the ATM.Many people on Thursday were glad to hear that these fees are going away. Supporters of the bill say the fees simply serve no purpose other than putting people into a deeper financial hole.
'Things happen especially in this economy, and it’s $35 and then if some other check bounces, it’s another $35,' said Marie of San Jose. 'It will definitely help out as far as keeping that money back in the household vs. the bank. Historically, the banks have done a lot of different things so that us consumers have no idea what they’re doing. So, I think it’s a great thing,' said Don Parish of Morgan Hill. The bill's authors explained the purpose of the law. In August, Sen. Ana Cabellero, CA-Dist. 14, explained the purpose of the law: 'AB 2017 will reign in junk fees and protect financially vulnerable consumers from charges they can’t afford.' The new law says state-regulated banks and credit unions cannot charge non-sufficient fund fees when an attempt to withdraw money is immediately declined because of insufficient funds. Tim Grayson, who first served in the House and was sworn in as a Senator earlier this month, authored the bill.'Consumers receive no service at all in exchange for the fee and the fees themselves, which average $34, do not represent the marginal costs to institutions for declining the transaction,' Grayson, CA-Dist. 9, said in April. AB 2017 was supported by consumer advocacy groups like California Low-Income Consumer Coalition and East Bay Community Law Center. The California Credit Union League was initially against the bill but eventually took a neutral stance. Governor Newsom signed the bill in September.Since 2015, banks with over a billion dollars in assets have been required to report revenue from overdraft or non-sufficient fund fee
OVERDRAFT FEES CONSUMER PROTECTION CALIFORNIA LEGISLATION BANKING INDUSTRY FINANCIAL REGULATION
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