US consumer watchdog pulls back ban on instant bank fees

The US consumer financial protection agency has withdrawn its proposal to ban banks from charging fees for instantly declined transactions. This means banks can continue to charge customers when a debit card purchase or ATM withdrawal is immediately rejected due to insufficient funds.

The agency had proposed to ban fees for transactions that are declined instantly, like a debit card swipe at a store. These fees often hit people with low balances hardest. Now, the agency will consider a broader approach to all types of insufficient funds fees, which could take longer to implement.