Finance

CFPB announces rule limiting bank overdraft fees

Published

4 weeks ago

December 12, 2024

Business Finance News

Rohit Chopra, director of the CFPB, testifies during a House Financial Services Committee hearing on June 14, 2023.

Tom Williams | Cq-roll Call, Inc. | Getty Images

The Consumer Financial Protection Bureau on Thursday announced the final version of a rule limiting banks’ ability to charge overdraft fees. It says the rule will save American consumers $5 billion annually.

The regulator said that banks could opt to charge $5 for overdrafts — a steep drop from the average fee of around $35 per transaction — or limit the fee to an amount that covers the lenders’ costs, or charge any fee while disclosing the interest rate of the loan.

“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 said in a statement. “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 effort, part of a flurry of activity from the CFPB in the waning days of the Biden administration, faces stiff opposition from U.S. banking groups that have successfully stymied other efforts from the regulator. For instance, a rule capping credit card late fees at $8 per incident that was set to take effect in May has been held up in federal court.

The CFPB said that its overdraft rule will take effect Oct. 1, 2025, though its ultimate fate is unclear.

Even before the election victory of Donald Trump last month, the fate of the overdraft rule would’ve been murky, thanks to industry pushback. But Trump is expected to install a new CFPB head next month that is unlikely to support Biden-era efforts to rein in banking activity.

Bank lobbying groups have argued that the overdraft rule, first proposed in January as part of Biden’s war on junk fees, would reduce access to overdraft services and could send customers to worse alternatives like payday loans.

The Consumer Bankers Association said Thursday it was “exploring all options” to push back against the rule.

This story is developing. Please check back for updates.

Finance

Chinese robot vacuum cleaner Roborock reveals AI-powered robotic arm

Published

3 hours ago

January 5, 2025

Business Finance News

EMBARGOED TO 1AM SG MON JAN 6 / 9AM PST SUN JAN 5 2025

Beijing-based robot vacuum maker Roborock revealed a new model in January 2025 with an artificial intelligence-powered folding arm for removing obstacles.

CNBC | Evelyn Cheng

BEIJING — Chinese robot vacuum cleaner company Roborock revealed a new model on Monday that comes with a folding arm for removing socks and other obstacles — a feature powered by artificial intelligence.

It’s the latest step toward what Roborock President Quan Gang expects will be the inevitable: that robot vacuum cleaners become as essential as washing machines.

That’s something that could happen in as soon as three years, especially with the emergence of AI, Quan told CNBC in a late November interview. “If the era of AI flourishing has really arrived, I’m confident that robot vacuum cleaners will be the first category to apply AI,” he said in Mandarin, translated by CNBC.

Using AI that the company developed, the Roborock Saros Z70 can detect and remove obstructions such as socks, small towels, tissues and sandals weighing less than 300 grams (10.58 ounces), according to the company.

The Saros Z70 is set for release in major global markets in the first half of the year, but Roborock has yet to announce pricing. The product reveal comes ahead of the Consumer Electronics Show that kicks off Tuesday in Las Vegas.

Jeff Bezos makes big bets on robotics and AI

Ever since Massachusetts-based iRobot launched its Roomba floor vacuuming robot in 2002, the circular machines have evolved to include mopping and the ability to automatically return to the charging base. Many companies, including several based in China, now sell robot vacuum cleaners.

Beijing-based Roborock started selling to the U.S. in 2018, Quan said, noting that sales in the country didn’t start to take off until 2023. Roborock also sells its robot vacuums in countries such as Germany, China and South Korea, and makes sure to adhere to local data privacy rules, Quan said.

But robot vacuum penetration rates remain low — just over 10% in developed countries and single digits in developing countries, Quan said. He said that’s both a challenge and a potential for growth, which he expects can get a boost from the integration of artificial intelligence.

The Verge and Wired late last year both named different Roborock models the best robot vacuum available. But the machines aren’t cheap.

“Roborock’s S8 MaxV Ultra ($1,799.99) is an exceptional vacuum cleaner,” The Verge said, noting it is “the best model in the relatively new category of ‘hands-free’ robot vacs, bots that do virtually everything for you: empty their bins, refill their mop tanks, and clean and dry their mop pads.”

“Roborock invented this category with the S7 MaxV Ultra and has been steadily improving it,” The Verge said.

Wired selected Roborock’s Qrevo S, which sells for $800 on Amazon. The review highlighted the Qrevo’s lidar-based navigation and AI feature which enable the machine to distinguish between carpets and tiles for vacuuming or mopping, respectively.

Competition is fierce. CNET said two other companies’ robot vacuums tied for best of 2025, the $900 Ecovacs Deebot T30S Combo — which also has a self-emptying dustbin — and the $359 iRobot Roomba Combo J7 Plus.

Supporting an AI research lab

Shares of Shanghai-listed Roborock closed 2.6% higher Friday after reports emerged of the Saros Z70 and its robotic arm. The stock climbed 10.3% in 2024.

Operating revenue rose by 23.2% for the first three quarters of 2024 to 7 billion yuan ($960 million), with profit of 1.47 billion yuan. Roborock does not break out revenue by region.

Quan said that soon after Roborock’s founding in July 2014, the company sensed the importance of artificial intelligence and set up a dedicated lab in Shanghai and a research institute in Shenzhen. Each location houses around 30 researchers, who only need to focus on technology, in contrast to the product development team that must meet deadlines and consider profit, Quan said.

The next challenge is to expand the number of researchers to around 300 people, Quan said, noting it’s been hard to find qualified talent.

The company spent 9.1% of its operating revenue in the first three quarters of 2024 on research and development, according to CNBC calculations of public figures. That’s up from slightly more than 7% in each of the past three years, the data showed.

Roborock on Monday also announced updates to its washing machines, which can dry clothes in the same unit.

— CNBC’s Sonia Heng contributed to this report.