Director Consumer Financial Protection Bureau Rohit Chopra: Cash advance practices need changes
Recently, the Consumer Financial Protection Bureau Director Rohit Chopra (CFPB) said that his department intends to come to grips with the issue of excessive payments on cash advance in the United States. There are many situations when interest payments on purchases of $ 10 can end up costing the consumer 8 times more. Moreover, such rates exist for the most part only for low-income segments of the population which causes a heavy public outrage.
Bankers shamelessly charge high interest rates not even hiding that this is the most profitable, albeit not honest, way of making a profit for them. According to the CFPB, in 2019, the country’s three largest banks earned over $ 5 billion in overdraft profits, and the total market profit equaled to $ 15 billion. That is a vast sum, isn’t it?
The history of the emergence of overdrafts
It’s hard to believe now, but the emergence of overdrafts at the beginning of the late 20th century was aimed at encouraging customers to buy. This service was provided by banks completely free of charge cash advance, without charging a commission. For example, banks allowed their regular customers to pay rent or electricity bills by check in the mail in cash advance, even before they received their paychecks.
However, when the population became hooked on this service, in the early 2000s, almost all banks made the overdraft service paid and began to charge a commission. Banks’ profits only increased over the years https://www.instantcashtime.com/no-credit-check/. For example, Bank of America overdraft fees are $ 35 per $ 100, Wells Fargo fees are $ 35, and Chase fees are $ 34.
What CFPB offers
Obviously, by proposing to tighten control over the collection of overdraft fees, the CFPB is not trying to completely stop this practice. It is beneficial for low-income segments of the population, and helps to avoid complicated procedures for obtaining a bank loan. The Bureau proposes a number of measures aimed at regulating the process, as well as alleviating the financial burden for low-income individuals. The following measures are proposed:
Additional measures to control this process are also being discussed. A proposal was made to all banks engaged in this field of activity to make proposals for optimizing the process in the initial quarter of 2022.
How banks reacted to the CFPB’s actions
Almost immediately after the statement of CFPB Director Rohit Chopra, the Director of Capital One Richard Fairbank announced the abolition of cash advance collection from clients in the new 2022. He called this step a manifestation of humanity and simplification of life for US citizens. However, why did this step follow only after the statement of the CFPB head?
Most banks, even though they tightened controls, have not given up on high fees. Yes, JPMorgan Chase stated that it intends to introduce a daily grace period for its clients, but there are no plans to cut interest rates on payments. Many banks have openly stated that overdraft payments are easy money, and that no one is going to voluntarily give up such profits. Well, then the CFPB statement was announced just in time.
Looking for IKEA-style furniture with different vibes, price ranges, or convenience? These 13 alternative stores offer modern, functional, and budget-friendly pieces perfect for any space. Store Style Focus Price Range (USD) Product Types Shopping Experience Amazon All styles (varied brands) $20 – $2,000+ Full home range + accessories Fast delivery, massive selection Walmart Traditional, modern […]
Kitchen remodels carry a unique kind of pressure. It’s the most-used room in the home and the one most likely to test your patience during construction. Even a small project can bring hidden costs, layout limitations, or weeks of inconvenience. That’s why planning goes far beyond tile samples and appliance catalogs. Before knocking down walls […]
Timeless elegance of wood In the world of architecture, wood possesses an unparalleled beauty that speaks to the heart. Its rich hues and natural textures invite warmth into any space, fostering a unique blend of comfort and elegance. Wood isn’t just a building material; it carries with it stories of time, craftsmanship, and nature. As […]
The Indian farmhouse accommodation goes on to capitalize on a mature evolutionary synthesis of ancestral aesthetics and contemporary features. With this, the outside and the inside of farmhouses became places of comfort with nature. In this blog, we delve into 15 incredible farmhouse designs that entail a harmonious blending. While they exhibit different spaces in […]
When it comes to enhancing the kitchen window over the sink, various design ideas are possible to decorate Indian homes. From rooted in tradition to Western-style modular kitchens offer both functionality and attractive aesthetics. Apart from the sleek profile and raised breakfast counter, the kitchen window over sink is another spot to add appeal and […]
Indian homes place equal importance on pooja room door designs as they do on main door designs. With diverse and unique ethnic backgrounds, every family strives to reflect their personalities and identities in their designs. These identities can encompass religious or spiritual interests, local contexts, or other personal elements. This series of blogs, featuring 50 […]
Pillar design is a cornerstone of architectural elegance, seamlessly blending structural support with aesthetic appeal. Our blog, “50 Best Pillar Design Inspirations,” celebrates this essential element, showcasing a variety of styles from classical Doric and Ionic to contemporary and avant-garde innovations. Whether you’re an architect, interior designer, or a design enthusiast, these pillar design inspirations […]
The integration of screening evergreen trees serves as an artful blend of practicality and natural beauty. These screening evergreen trees, with their lush foliage and diverse benefits, play a crucial role in enhancing privacy. It also blocks unwanted views, and contributes to the overall well-being of homeowners. From the majestic Jamun trees to the versatile […]
Gate Design is an important feature of any home. Numerous scopes for experimentation open up when delving into the design possibilities. Materials like wood and black steel are popular options in Indian homes. At the same time, designers also experiment with a combination of materials that suits their aesthetic. Buying mass-produced Sydney automated gates has […]