Biden administration unveils new rules aimed at reducing overdraft fees

TheStreet’s J.D. Durkin brings the latest business headlines from the floor of the New York Stock Exchange as markets close for trading Wednesday, January 17th.

Full Video Transcript Below:

J.D. DURKIN: I’m J.D. Durkin, reporting from the New York Stock Exchange. Stocks were in the red to close out today’s session. The Dow closed 94 points lower, the Nasdaq closed nearly six-tenths of a percent lower, and the S&P closed up half a percent. This comes after a better-than-expected retail sales report, which saw a resilient consumer, with spending up 0.6 percent in December. Investors are concerned that this could throw cold water on interest rate cuts in the near future.

In other news, the Biden administration has proposed new rules that would save consumers billions of dollars a year on bank overdraft fees. According to the Consumer Financial Protection Bureau, consumers are typically charged $35 for an overdraft loan, even though the majority of consumers’ debit card overdrafts are for less than $26 and are repaid within three days. Big banks make roughly $9 billion a year in revenue from overdraft fees alone.

But the new rule proposed by the CFPB could see those fees lowered to as little as $3. The rule would apply only to those banks and credit unions with at least $10 billion in assets. Of the proposed changes, President Biden said, “Today’s proposal would cut the average overdraft fee by more than half, saving the typical American family that pays these fees $150 a year. That would add up to save families $3.5 billion every year.”

The Biden administration has been adamant about cracking down on “junk fees” and forcing companies to be more transparent about what consumers are actually being charged for.

That’ll do it for your daily briefing. From the New York Stock Exchange, I’m J.D. Durkin with TheStreet.

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