New Laws That Directly Impact Your Wallet

As 2025 begins, several new laws in California are set to take effect, bringing significant financial changes for residents. These laws cover issues such as overdraft fees, subscriptions, and medical debt, all of which can have a direct impact on your budget.

According to ABC 10, hundreds of new laws signed by California Governor Gavin Newsom will go into effect this year, including several that will affect your financial well-being. Here’s a breakdown of some of the most impactful ones:

Overdraft Fees

The Consumer Financial Protection Bureau estimates that 23 million U.S. households pay overdraft fees each year.

Maureen Pally, a financial expert, explains: “If I overdraft by $25, I don’t just need to put $25 back into my account—I also have to pay an additional $35 fee.”

To address this, California has passed two new laws aimed at reducing overdraft fees. Under these laws:

• Banks and credit unions regulated by the state can no longer charge overdraft fees to customers who attempt to withdraw money without sufficient funds.
• Credit unions now have limits on overdraft fees, providing additional protection for low-income consumers.

These laws are designed to support lower-income individuals who are disproportionately affected by overdraft fees.

Pally adds, “These fees have long had a negative impact on consumers, especially those who don’t have enough liquidity to cover them.”

These regulations take effect on January 1, 2025.

Medical Debt Relief

As of January 1, 2025, medical debt will no longer appear on credit reports. While this law does not forgive the debt, it ensures that unpaid medical bills will not negatively affect your credit score.

Medical debt has long been a major factor in lowering credit scores, making it harder for individuals to secure loans or mortgages with favorable terms.

However, this law does not apply to medical credit card debt, which will still be reported.

Subscription Cancellations Made Easier

A new subscription law will make it easier for consumers to cancel subscriptions.

Under this regulation, companies must offer cancellation options through the same method used for signing up. For example, if you subscribed online, you must be able to cancel online without additional steps.

A recent CNET survey found that consumers spend an average of $91 per month on subscriptions, totaling over $1,000 annually.

Nikki Wolney, editor at CNET, explains: “Many subscription providers gradually increase their prices, usually by just $1 or $2 per year. But over time, these small increases add up significantly.”

This law will take effect in July 2025.

Food Delivery Transparency

If you use food delivery services like Uber Eats or DoorDash, a new law will require greater transparency regarding the identity of your delivery driver.

Customers will soon be able to see more details about their delivery driver, including their name and photo, enhancing security for consumers.

This regulation is set to go into effect in March 2025.

How These Laws Affect You

From overdraft fee reductions to medical debt protections and simplified subscription cancellations, these new California laws aim to provide financial relief and consumer protection. While some regulations are already in effect, others will roll out throughout 2025, giving consumers more control over their finances.