Several new laws go into effect on Wednesday — and one of them could impact your wallet.
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.
New California laws:
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Some economists predict the measures will have a big impact.
“If you get hit with a fee for overdrawing your account of $30 or more, that’s a big impact, particularly for people who don’t already have a lot of money in their bank accounts,” said Dr. Alan Gin, an economics professor at the University of San Diego.
Some Californians are weighing the pros and cons of the measures.
“It’s good for the people, but you don’t want to see people start to abuse that," Krista Chriscoe, a California resident, said. "Isn’t that expensive for the banks if the people are continuously over drafting their accounts at a cheaper rate?"
Consumers paid nearly $6 billion in overdraft fees in 2023, according to the Consumer Financial Protection Bureau.
