Biden administration approves overdraft limits angering banks

The new rule limits what banks can charge for overdraft fees, potentially saving consumers up to $5 billion annually. Large financial institutions must either cap fees at $5, cover costs and losses, or disclose loan terms. This rule aims to close outdated loopholes and reduce excessive fees, taking effect in October.

What is the estimated annual savings for consumers due to the new overdraft fee rule?

• $1 billion

• $3 billion

• $5 billion

• $10 billion

Which of the following is NOT an option for financial institutions under the updated reforms?

• Disclose terms like other loans

• Eliminate all overdraft fees

• Cap fees to cover costs and losses

• Cap overdraft fees at $5

What must financial institutions do if they choose to disclose the terms of their overdraft loans?

• Offer a discount on overdraft fees

• Notify customers via email

• Provide a monthly report to the regulator

• Follow the same disclosure rules as other loans

What does the regulator aim to achieve by closing outdated overdraft loopholes?

• Increase bank profits

• Reduce excessive junk fees

• Simplify banking processes

• Encourage more loans

When is the new rule expected to take effect?

• October

• April

• January

• December