CFPB announces new overdraft fee limits

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and how the CFPB is saving Americans $5 billion.

Transcript

00:00I'm Conway Gaines reporting from the New York Stock Exchange.

00:02Here's what we're watching on the street today.

00:04The latest inflation numbers came in a little hot.

00:07Producer prices rose more than expected in November, up 0.4%.

00:13Meanwhile, prices were up 3% over the past 12 months.

00:16That's the biggest annual gain since February 2023.

00:21In other news, the final rule cracking down on overdraft fees

00:25was announced by the Consumer Financial Protection Bureau.

00:28The agency, created in wake of the great financial crisis,

00:30said the new rule will keep $5 billion a year, or $225 per household,

00:37in Americans' pockets and out of the hands of the banks.

00:41According to the rule, banks can charge a flat overdraft fee of $5 per occurrence,

00:47compared to the average current penalty of $35,

00:51or simply charge customers the amount it costs to cover the overdraft.

00:56The third alternative allows the bank to charge whatever it wants,

01:00as long as customers know what the interest rate on the overdraft loan is up front.

01:05In a statement released with the ruling, CFPB Director Rohit Chopra said,

01:10For far too long, the largest banks have exploited a legal loophole

01:14that has drained billions of dollars from Americans' deposit accounts.

01:19The CFPB is cracking down on these excessive junk fees

01:23and requiring big banks to come clean about the interest rate they are charging on overdraft loans.

01:29It is supposed to go into effect on October 1, 2025.

01:33There are doubts, however, that it will ever see the light of day

01:36under a pro-business Trump administration.

01:40That'll do it for your daily briefing from the New York Stock Exchange.

01:43I'm Conway Gittins with the Street.

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