1. New limits on overdraft fees

Some Californians may breathe a sigh of relief when it comes to overdraft fees. As of Jan. 1, state-regulated banks and credit unions have been prohibited from charging a fee for withdrawals that are immediately declined due to insufficient funds.

In addition, starting in 2026, overdraft fees at credit unions will be limited to $14, unless a lower federal limit is set.

According to the Consumer Financial Protection Bureau, overdraft fees and non-sufficient funds fees totaled $5.8 billion across the country in 2023. In late 2024, the agency says it took action regarding big banks and overdraft fees, which it estimates would save consumers $5 billion annually.

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2. Restrictions on how medical debt impacts credit

Effective Jan. 1, it’s prohibited in California for most medical debt from showing up on a credit record or being counted as a negative factor when lenders decide whether to offer credit.

The Biden administration announced a similar rule change at the federal level, however, it’s been met with opposition and its future under the Trump administration is up in the air.

Around 41% of U.S. adults had some debt due to medical or dental bills, according to a 2022 KFF survey.

3. Canceling subscriptions will be easier

Getting rid of unwanted subscription services will soon be easier in California.

There will be a new series of safeguards on subscription contracts signed or renewed after July 1, 2025, ensuring consumers expressly consent to the auto-renewal of these deals. The new law is also designed to make it as easy to cancel a subscription as it is to sign up for it.

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Christy Bieber Freelance Writer

Christy Bieber a freelance contributor to Moneywise, who has been writing professionally since 2008. She writes about everything related to money management and has been published by NY Post, Fox Business, USA Today, Forbes Advisor, Credible, Credit Karma, and more. She has a JD from UCLA School of Law and a BA in English Media and Communications from the University of Rochester.

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