Business

Overdraft fees would be slashed under new Biden administration rule. What you need to know

Published

1 year ago

December 15, 2024

Overdraft fees would be slashed under new Biden administration rule. What you need to know

If your bank account regularly flirts with negative balances, or you’re just bad at keeping track of your debit card swipes, you’ve probably felt the sting of one of the banking industry’s favorite charges: overdraft fees.

Thanks to a rule finalized Thursday by the federal Consumer Financial Protection Bureau, those fees could drop sharply next year — provided the rule isn’t overturned by Congress or the courts before it goes into effect Oct. 1.

U.S. banks and credit unions opposed the rule, and four of their trade groups filed suit to block it hours after the final rule was announced. One of the groups, the American Bankers Assn., asserted the rule will prompt banks to offer less overdraft protection, which prevents overdrawn checks from bouncing and debit card transactions from being declined.

That protection comes at a price, though, in the form of overdraft fees of about $27 each time a customer withdraws more than their checking account could bear, Bankrate.com reported in August. Last year, according to the CFPB, banks collected about $5.8 billion worth of fees for overdrafts and non-sufficient funds — that is, when a check bounces or a payment is declined.

The CFPB rule is one of several efforts by the Biden administration to attack the estimated $90 billion collected annually in “junk” fees, or hidden charges that have no relation to the costs incurred. Others include a CFPB rule to cut late fees on credit card payments, a Transportation Department rule limiting fees on airline tickets and a Federal Trade Commission proposal taking broad aim at fees charged by ticketing companies, hotels and other service providers.

Under the overdraft rule, large banks and credit unions would have three options when setting fees: They could charge an amount based on the cost of the service, including losses from it; they could charge $5 per overdraft; or they could charge an amount that would generate a profit, but only if they disclosed the interest rate and other terms in advance and sent periodic statements to customers. The third option treats overdraft protection as a form of short-term lending, which technically it is.

Banks and credit unions with $10 billion or less in assets are exempt from the rule.

According to the CFPB, overdraft protection began decades ago as a courtesy that banks offered to customers who had to wait days for paper checks to clear. But as debit cards became more prevalent, banks and credit unions started generating significant profits from those charges. In California, state data show that some credit unions generate more than half their net income from overdraft fees.

A view of the U.S. Consumer Financial Protection Bureau in Washington, D.C., on April 3, 2021.

(Graeme Sloan / Associated Press)

Consumer advocates have been pushing for limits on “predatory” overdraft fees for decades. The fees are coming “overwhelmingly from low-income and a little bit from moderate-income consumers,” who are “by and large living paycheck to paycheck,” said Robert Herrell, executive director of the Consumer Federation of California. “That’s what we find just wholly unacceptable.”

The CFPB has found that less than 10% of consumers pay nearly 80% of the fees, incurring 10 or more charges a year. Since the pandemic began in 2020, though, banks’ revenue from those fees and “non-sufficient funds” charges — incurred when a bank refuses to cover an overdraft — has dropped sharply, partly because of regulators’ scrutiny.

All the same, the bureau estimates that the rule could save consumers up to $5 billion a year, or $225 per household that incurs overdraft fees.

“In practice, overdraft fees have functioned as high-cost credit, so it only makes sense to regulate excessive fees as such,” said Mike Litt, director of the Public Interest Research Group’s consumer campaign. “The CFPB’s rule makes overdraft fees more reasonable and in line with the actual costs to banks.”

The bankers association was not so sanguine, saying the bureau should have held off until the Trump administration takes over. In former President Trump’s first term, his appointees at the CFPB vastly scaled back its rulemaking efforts.

“By taking this action, the Bureau has once again chosen to prioritize demonizing highly regulated and transparent bank fees over its mission to help consumers,” Rob Nichols, president and chief executive of the American Bankers Assn., said in a statement. “This rule, and the government price controls that accompany it, will make it significantly harder for banks to offer this valuable service to their customers, including those who have few other options to cover essential payments.”

Nichols said Americans have made it clear in surveys that they don’t want overdraft protection to go away. He also argued that the bureau didn’t have the legal authority to cap the price of overdraft fees, adding that the rule “should not be allowed to go into effect.”

Nadine Chabrier, senior policy and litigation counsel at the Center for Responsible Lending, responded that banks can continue offering overdraft protection as a form of credit, but they’ll have to comply with the same rules that apply to other types of credit. According to Chabrier, the new rule keeps pace with the change in overdraft protection as paper checks have been replaced with instant debits.

The lawsuit from the banks and credit unions, which was filed in Mississippi, claims the CFPB exceeded its statutory authority in applying the federal Truth in Lending Act to overdraft protection services. It also argues that several key aspects of the rule are arbitrary and capricious, and asks the court to declare the rule illegal in its entirety.

Another test for the CFPB rule is likely to be from the Republican-controlled Congress. Under the Congressional Review Act, members will have 60 days after the rule is formally submitted to introduce a resolution to disapprove it. The resolution cannot be filibustered, and needs just a simple majority in the House and Senate to pass.

Other protections previously adopted by the CFPB will remain in place regardless of what happens to the new rule. An important one is that consumers must opt in to overdraft protection, so they will know that overdrafts will be allowed — but will carry a fee. Another is guidance issued in 2022 instructing banks not to process debit-card transactions and deposits in an order that would generate unexpected overdrafts.

California lawmakers enacted two measures this year to provide further protection for consumers against overdraft and non-sufficient funds fees. Senate Bill 1075 limits state-chartered banks and credit unions from charging overdraft fees larger than the amount set by the CFPB or $14, whichever is lower. If the CFPB’s rule is blocked, that law will continue to apply to state-chartered institutions.

Another law, Assembly Bill 2017, bars state-chartered banks and credit unions from charging non-sufficient funds fees on debit-card transactions that are declined because the account is overdrawn.

Business

Disneyland Resort President Thomas Mazloum named parks chief

Published

3 hours ago

March 11, 2026

Press Room

Disneyland Resort President Thomas Mazloum named parks chief

Disneyland Resort President Thomas Mazloum has been named chairman of Walt Disney Co.’s experiences division, the company said Tuesday.

Mazloum succeeds soon-to-be Disney Chief Executive Josh D’Amaro as the head of the Mouse House’s vital parks portfolio, which has become the economic engine for the Burbank media and entertainment giant. His purview includes Disney’s theme parks, famed Imagineering division, merchandise, cruise line, as well as the Aulani resort and spa in Hawaii.

Jill Estorino will become the head of Disneyland Resort in Anaheim. She previously served as president and managing director of Disney Parks International and oversaw the company’s theme parks and resorts in Europe and Asia.

Estorino and Mazloum will assume their new roles on March 18, the same day as D’Amaro and incoming Disney President and Chief Creative Officer Dana Walden.

“Thomas Mazloum is an exceptional leader with a genuine appreciation for our cast members and a proven track record of delivering growth,” D’Amaro said in a statement. “His focus on service excellence, broad international leadership and strong connection to the creativity that brings our stories to life make him the right leader to guide Disney Experiences into its next chapter.”

Mazloum had been about a year into his tenure at Disneyland. Before that, he was head of Disney Signature Experiences, which includes the cruise line. He was trained in hospitality in Europe.

In his time at Disneyland, Mazloum oversaw the park’s 70th anniversary celebration and recently pledged to eliminate time limitations for park-hopping, which are designed to manage foot traffic at Disneyland and California Adventure.

Mazloum will now oversee a 10-year, $60-billion investment plan for Disney’s overall experiences business, which includes new themed lands in Disneyland Resort and Walt Disney World. At Disneyland, that expansion could result in at least $1.9 billion of development.

The size of that investment indicates how important the parks are to Disney’s bottom line. Last year, the experiences business brought in nearly 57% of the company’s operating income. Maintaining that momentum, as well as fending off competitors such as Universal Studios, is key to Disney’s continued growth.

In his new role, Mazloum will have to keep an eye on “international visitation headwinds” at its U.S.-based parks, which the company has said probably will factor into its earnings for its fiscal second quarter. At Disneyland Resort, that dip was mitigated by the park’s high percentage of California-based visitors.

Times staff writer Todd Martens contributed to this report.

Business

What soaring gas prices mean for California’s EV market

Published

15 hours ago

March 10, 2026

Press Room

What soaring gas prices mean for California’s EV market

It has been a bumpy road for the electric vehicle market as declining federal support and plateauing public interest have eaten away at sales.

But EV sellers could soon receive a boost from an unexpected source: The war in Iran is pushing up gas prices.

As Americans look to save money at the pump, more will consider switching to an electric or hybrid vehicle. Average gas prices in the U.S. have risen nearly 17% since Feb. 28 to reach $3.48 per gallon. In California, the average is $5.20 per gallon.

Electric vehicles are pricier than gasoline-powered cars and charging them isn’t cheap with current electricity prices, but sky-high gas prices can tip the scales for consumers deciding which kind of vehicle to buy next.

“We probably will see an uptick in EV adoption and particularly hybrid adoption” if gas prices stay high, said Sam Abuelsamid, an auto analyst at Telemetry Agency. “The last time we had oil prices top $100 per barrel was early 2022 and that’s when we saw EV sales really start to pick up in the U.S.”

In a 2022 AAA survey, 77% of respondents said saving money on gas was their primary motivator for purchasing an electric vehicle. That year, 25% of survey respondents said they were likely or very likely to purchase an EV.

As oil prices cooled, the number fell to16% in 2025.

In California, annual sales of new light-duty zero-emission vehicles jumped 43% in 2022, according to the state’s Energy Commission. The market share of zero-emission vehicles among all light-duty vehicles sold rose from 12% in 2021 to 19% in 2022.

“Prior to 2022, we didn’t really have EVs available when we had oil price shocks,” Abuelsamid said. “But every time we did, it coincided with a move toward more fuel-efficient vehicles.”

Dealers are anticipating a windfall.

Brian Maas, president of the California New Car Dealers Assn., predicted enthusiasm for EVs will rebound across California if oil prices don’t come down.

“If prior gasoline price spikes are any indication, you tend to see interest in more fuel-efficient vehicles,” he said.

Rising gas prices could be a lifeline for EV makers at a time when federal support for green cars has been declining.

Under President Trump, a federal $7,500 tax incentive for new electric vehicles was eliminated in September, along with a $4,000 incentive for used electric vehicles.

In California, the zero-emission vehicle share of the total new-vehicle market was 22% through the first 10 months of 2025, then dropped sharply to 12% in the last two months of the year, according to the California Auto Outlook.

Meanwhile Tesla, the most popular EV brand in the country, has grappled with an implosion of its reputation with some consumers after its chief executive, Elon Musk, became one of Trump’s most vocal supporters and helped run the controversial Department of Government Efficiency.

Over the last several months, Ford, General Motors and Stellantis have pared back EV ambitions.

Other automakers, including Nissan, announced plans to stop producing their more affordable electric models.

The Trump administration has moved to roll back federal fuel economy standards and revoked California’s permission to implement a ban on new gas-powered car sales by 2035.

David Reichmuth, a researcher with the Clean Transportation program in the Union of Concerned Scientists, said the shift in production plans will affect EV availability, even if demand surges.

That could keep people from switching to cleaner vehicles regardless of higher gas prices.

“This is a transition that we need to make for both public health and to try to slow the damage from global warming, whether or not the price of gasoline is $3 or $5 or $6 a gallon,” he said.

According to Cox Automotive, new EV sales nationally were down 41% in November from a year earlier. Used EV sales were down 14% year over year that month.

To be sure, oil prices can fluctuate wildly in times of uncertainty. It will take time for consumers to decide on new purchases.

Brian Kim, who manages used car sales at Ford of Downtown LA, said he has yet to see a jump in the number of people interested in EVs, hybrids or more fuel-efficient gas-powered engines.

Still, if the price at the pump stays stuck above its current level, it could happen soon.

“Once the gas prices hit six [dollars per gallon] or more and people feel it in their pocket, maybe things will start to change,” he said.

Business

Nearly 60 gigawatts of U.S. clean power stalled, trade group finds

Published

1 day ago

March 10, 2026

Press Room

Nearly 60 gigawatts of U.S. clean power stalled, trade group finds

A total of 59 gigawatts of U.S. clean energy projects are facing delays at a time when demand for power from AI data centers is surging, according to a trade group study.

Developers are seeing an average delay of 19 months over issues such as long interconnection times, supply constraints and regulatory barriers, the American Clean Power Assn. said in a quarterly market report.

The backlog is happening despite the growing need for power on grids that are being taxed by energy-hungry data centers and increased manufacturing. The Trump administration has implemented a slew of policies to slow the build-out of solar and wind projects, including delaying approvals on federal lands.

The potential energy generation facing delays is the equivalent of 59 traditional nuclear reactors, enough to power more than 44 million homes simultaneously.

“Current policy instability is beginning to impact investor confidence and negatively impact project timelines at a time when demand is surging,” American Clean Power Chief Policy Officer JC Sandberg said in a statement.

Despite the hurdles, developers were able to bring more than 50 gigawatts of wind, solar and batteries online in 2025, accounting for more than 90% of all new power capacity in the U.S., the report found. Clean power purchase agreements declined 36% in 2025 compared with 2024, signaling that the build-out of clean power in the U.S. could be lower in the 2028 to 2030 time period, according to the report.

Chediak writes for Bloomberg.