California is rightly considered a leader in technology, culture and public policy. For instance, our state famously broke new ground in the 1960s with auto emissions standards that the federal government later adopted. California must once again take the lead, this time to stop banks and credit unions from ripping off consumers with overdraft fees. Even as some banks and credit unions have cut back on overdraft fees, many depository institutions keep this gravy train running. The size of the fee — usually around $35 for each overdraft — far exceeds the cost to the depository. Absent policy intervention, banks and credit unions will maintain exploitative overdraft programs that extract billions of dollars from people struggling to get by.
