New Rule to Protect Borrowers from Repeated Overdraft Bank Fees and Payday Loans
On March 30, 2025, a new rule from the Consumer Financial Protection Bureau (CFPB) started. It helps people who take out payday loans, repeat overdraft fees and other expensive loans.
Here’s what the rule does:
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Stops repeated payment attempts: If a lender tries to pull money from your bank account twice and it doesn’t work (because you don’t have enough money), they can’t keep trying unless you say it’s okay. This new rule protects you from getting hit with lots of bank overdraft fees.
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Covers different types of loans: The rule doesn’t just apply to payday loans. It also covers title loans (where you use your car as collateral) and some high-interest installment loans (loans with an APR over 36%).
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How it’s enforced: State attorneys general have the authority to enforce the rule, despite the CFPB’s stated lack of focus on its enforcement. You can also use the rule in court if a lender breaks it.
Why it matters:
This rule prevents individuals from repeatedly incurring charges due to insufficient funds in their account. It also gives borrowers a way to fight back if lenders don’t follow the rules.
To learn more about the rule and what it means, you can read the full article here: NCLC Digital Library.
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
*Important Note from Diane: Everything on this web site is offered for educational purposes only and not intended to provide legal advice, nor create an attorney client relationship between you, me, or the author of any article. Information in this web site should not be used as a substitute for competent legal advice from an attorney familiar with your personal circumstances and licensed to practice law in your state. Make sure to check out their reviews.*
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