1. New limits on overdraft fees
Some Californians consumers 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 will save consumers $5 billion annually.
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Learn More2. 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 meeting opposition as the current presidential term winds down.
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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