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.
In interior design today, how you place decorative objects makes the difference between a good space and a great one. While architecture gives you the bones and furniture handles function, decorative objects create the personality and emotional connection that makes a space feel complete. This isn’t just about making things look pretty. It’s about understanding […]
Picture this: You’re juggling groceries, coffee, and your laptop bag while fumbling for house keys that are nowhere to be found. Or maybe you’re standing in the rain, patting down every pocket twice before realizing your keys are on the kitchen counter. We’ve all been there. It’s a common struggle that can turn a simple […]
In recent years, India has experienced a significant shift in its work culture, driven by the rise of startups, freelancers, digital nomads, and hybrid work models. At the heart of this transformation lies the rapid growth of co-working spaces, vibrant, flexible environments that blur the lines between traditional offices and collaborative studios. But behind the […]
For many homeowners in San Diego, the kitchen is more than just a space to cook — it is the heart of the home, where meals, memories, and connections are made. If you’re considering a kitchen remodeling in San Diego this year, you’re in the right place. The latest trends blend functionality, elegance, and California-inspired […]
In the world of modern architecture, metal isn’t just about cold, hard construction. It’s about artistic vision, structural brilliance, and a dash of unexpected charm. As buildings evolve from mere shelters to bold statements of style and innovation, metal elements take center stage. They provide not only strength and durability but also the fine details […]
Managing a client project or designing a personal space? What if I told you you can use advanced tech to expedite planning, visualise outcomes, and make better decisions? 3D walkthroughs, automated measurements, and even AI-powered recommendations now make it possible to create the best layouts without relying solely on mood boards and sample colours. Solve […]
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 […]
The door design for main door is a defining feature of any Indian home, embodying both style and cultural significance. In a country rich with diverse architectural traditions, the entrance to your home reflects not only personal taste but also cultural heritage. Whether you’re drawn to the intricate carvings of traditional Indian door designs or […]