New California law limits overdraft fees at banks supervised by the state

[1srelluc]

New California law limits overdraft fees at banks supervised by the state

A California law goes into effect on Wednesday that limits overdraft fees at banks supervised by the state.

www.nbcsandiego.com

The law will prevent state-chartered banks from charging fees for withdrawals that are immediately declined, including for insufficient funds. It covers financial institutions regulated by the state of California, which tend to be smaller banks. A list can be found here.

Another bill, SB-1075, is set to go into effect on Jan. 1, 2026, and will limit credit union overdraft fees for insufficient funds to $14.

Everything I’ve read regarding laws put in place limiting or banning over draft, late pay, interest charges, etc, just wind up getting passed back to consumers through other fees or charges.

In the case of checking accounts, they require a minimum balance or charge a monthly checking fee. That tends to hurt the people who the law is supposed to be helping more since they either don’t have enough to meet the minimum balance or they wind up getting fee’d for just having the account.

None the less, this doubles down by hammering the smaller institutions putting them at a competitive disadvantage to the large federal ones. That lowers competition in the long run and strengthens the big banks that could give a crap period.

Long story short, fees suck, but government intervention just screws it up more and makes for less competition.

National banking chains are not affected so CA decided just to hurt state chartered small regional banks/credit unions.

 

[Dante]

New California law limits overdraft fees at banks supervised by the state

A California law goes into effect on Wednesday that limits overdraft fees at banks supervised by the state.

www.nbcsandiego.com

The law will prevent state-chartered banks from charging fees for withdrawals that are immediately declined, including for insufficient funds. It covers financial institutions regulated by the state of California, which tend to be smaller banks. A list can be found here.

Another bill, SB-1075, is set to go into effect on Jan. 1, 2026, and will limit credit union overdraft fees for insufficient funds to $14.

Everything I’ve read regarding laws put in place limiting or banning over draft, late pay, interest charges, etc, just wind up getting passed back to consumers through other fees or charges.

In the case of checking accounts, they require a minimum balance or charge a monthly checking fee. That tends to hurt the people who the law is supposed to be helping more since they either don’t have enough to meet the minimum balance or they wind up getting fee’d for just having the account.

None the less, this doubles down by hammering the smaller institutions putting them at a competitive disadvantage to the large federal ones. That lowers competition in the long run and strengthens the big banks that could give a crap period.

Long story short, fees suck, but government intervention just screws it up more and makes for less competition.

National banking chains are not affected so CA decided just to hurt state chartered small regional banks/credit unions.

Damn people trying to help the average citizen. What is wrong with them? Commerce is King. Long Live Ripping Off Consumers!!!

 

[Thunk]

Result: Banks close the account. Mail you a check for the remaining balance. But you have no place to deposit that check because you have no bank account

Another fine job by DEMOCRATS!

 

[toobfreak]

Long story short, fees suck, but government intervention just screws it up more and makes for less competition.

Banks are fucked. I hate the banks. They are forever ruined by federalization. Dealing with your bank is now like just dealing with another branch of the fed government. You are treated like a criminal with suspicion in your every dealing.

 

[1srelluc]

Banks are fucked. I hate the banks. They are forever ruined by federalization. Dealing with your bank is now like just dealing with another branch of the fed government. You are treated like a criminal with suspicion in your every dealing.

You are not far wrong.....Renew a CD......I'll need two forms of ID, never mind I've known the banker since she was in school with my daughter.

Not her fault though.

 

[toobfreak]

You are not far wrong.....Renew a CD......I'll need two forms of ID, never mind I've known the banker since she was in school with my daughter.

And I bet her answer was: "I have to do it, it is THE LAW."