Biden administration pushes to trim hefty bank overdraft charges.

In a new proposal, the Biden administration is seeking to cap the penalties that banks charge customers for overdraft fees. Overdraft fees have become a significant source of income for big banks, with an average charge of $26.61 per overdraft. These fees often impact low-income families the most, causing President Biden to label them as “hidden junk fees” and “exploitation.” However, the banking industry has swiftly pushed back against the proposal, arguing that it would eliminate a valuable service and harm competition and innovation. Banks have already made some voluntary efforts to limit overdraft fees, such as implementing delayed time periods to bring accounts into balance. The Biden administration’s proposal suggests setting a standard fee equal to the bank’s cost to process the transaction, which could range from $3 to $14.