Today, the Consumer Financial Protection Bureau released a statement declaring it has closed “an outdated overdraft loophole that exempted overdraft loans from lending laws.” The agency’s final rule on overdraft fees applies to banks and credit unions with assets exceeding $10 billion.
The reforms will provide large banks with several options for managing their overdraft lending programs. The rule amendment is projected to save consumers up to $5 billion annually in overdraft fees, equating to approximately $225 per household.
“For far too long, the largest banks have exploited a legal loophole that has drained billions of dollars from Americans’ deposit accounts,” CFPB Director Rohit Chopra stated. “The CFPB is cracking down on these excessive junk fees and requiring big banks to come clean about the interest rate they’re charging on overdraft loans.”
The proposal, part of Biden’s crackdown on junk fees, was introduced at the beginning of the year. So far, the Administration has enacted laws to enhance transparency regarding airline, event, car rental, hotel, banking, retirement, and credit card charges.
By CEO NA Editorial Staff
