New Proposed Rule Could Ease Financial Burdens, Change Overdraft Fees

The Consumer Financial Protection Bureau said large companies make billions of dollars in overdraft fees. Now a proposed rule could help ease financial burdens and protect your money.

Experts said this proposal targets junk fees, which can occur when purchasing tickets to a game or booking a flight.

They said a major part will also lower overdraft fees at banks.

The Consumer Financial Protection Bureau said 23 million households pay overdraft fees each year.

Paul Hood of Paul Hood and Associates CPA advises his clients to stay on top of their finances. That way they don’t have to worry about these overdraft fees, which can range anywhere from $25 to $35.

He said a lot of times these types of fees impact people who make less money.

Hood said this change would secure consumer protection through some of the largest banks, while only charging $3 to $14 for any necessary fees.

“Overdraft fees are not under attack. It’s the amount that’s being charged that's under attack. It’s borderline what’s called usury. It’s a punishment thing instead of a cost and that’s what they want. They want to get back down to where it’s reasonable," Hood explained.

Hood also advises people to check with your bank to see if it has overdraft protection.

“Our system of economics is great, but it can get out of hand if unchecked. Junk fees is what they’re called, what the government is calling them. They’re out control. It’s insane to think I write a $10 check you’re going to charge me 25 or 35 dollars because I’ve got eight dollars in my account. I’m two dollars short so you’re going to hit me with a 300%. So, regardless of why it's motivated it’s a good thing,” Hood said.

The proposed rule is open for public comment until April 1 and would likely go into effect in October of next year.