The Consumer Financial Protection Bureau is trying to clamp down on overdraft fees issued by the nation’s largest banks.
CFPB Director Rohit Chopra joined Yahoo Finance’s Jennifer Schoenberger to discuss the proposed changes to overdraft fees, noting that they are intended to enable consumers to “manage overdraft loans more effectively,” though the proposals do not eliminate them entirely.
Chopra says the banks showed “a lot of abuse” with overdraft fees, resulting in a “billion-dollar increase.” He says these new rules aim to “close a long-standing loophole” and impose fairer pre-conditions on clients.
While banks “will always seek profits everywhere they can,” Chopra calls the CFPB’s proposal “perfectly reasonable.” The average family dealing with these fees will save about $150 per year, Chopra says, adding that adding public input can help form strong guardrails against unfair practices while maintaining responsible fee structures.
“I don’t want to be in a world where we keep bailing out the biggest financial institutions on the planet,” Chopra tells Yahoo Finance, adding: “When they take risks, it should be the shareholders and executives who lose, not the losers.” The public bears the risk of a financial crisis.”
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Editor’s Note: This article was written by Angel Smith