-Californians who try to withdraw money but don't have enough in their bank accounts won't fall deeper into a financial hole from having to pay a fine.

That's because of a new state law that took effect January..

Assembly Bill 2017, which Governor Gavin Newsom signed into law in September, blocks a bank's ability to charge customers a penalty when their withdrawals are declined instantaneously, such as at ATMs because of insufficient funds.

The Consumer Federation of America, a sponsor of the bill, said common charges for insufficient funds are $30 or more.

The bill's author, Tim Grayson, a Democrat from Concord who was in the As.. through the end of the 2024 legislative session, said when he introduced it in May that it would help prevent fee creep in the banking industry.

-AB 2017, a straightforward measure that will rein in junk fees and protect financially vulnerable consumers from charges that they cannot afford.

-The new law, which applies to bank and credit unions that are regulated by the state, was backed by several consumer advocacy groups, such as the California Low Income Consumer Coalition and East Bay Community Law Center, which called penalties for insufficient funds "junk fees."

They said getting rid of these fees will protect financially vulnerable consumers.

This new law is the latest in a rising nationwide push to eliminate junk fees.

Newsom also signed another bill addressing overdraft fees.

Senate Bill 1075 will limit credit union fees for insufficient funds to $14 unless a lower federal limit is set.

That becomes law in 2026.

Newsom also signed Assembly Bill 2863, which will make it easier for consumers to cancel subscriptions and requires companies to get consent from their customers before charging them to renew or when a free trial ends.

That law goes into effect July 1st.

For CalMatters, I'm Levi Sumagaysay.