CFPB Signals Crackdown on Junk Fees
Updated: Jun 2, 2022
The Consumer Financial Protection Bureau, January 26, 2022, has launched an initiative to help protect American consumers from so-called “junk fees” charged by financial institutions. CFPB explains junk fees are exploitative fees added onto financial services to overcharge consumers for additional profit to the provider. These fees can be associated with banks, credit unions, prepaid or credit card accounts, credit cards, mortgages, loans, or payment transfers.
The following types of charges have been called out as common forms of potential junk fees:
● Late fees
● Overdraft fees
● Non-Sufficient Funds (NSF) fees
● Convenience fees
● Wire transfer fees
● Ancillary fees in the mortgage closing process
● And more
The Bureau’s research showed that in 2019, U.S. banks charged customers $29 Billion dollars in punitive fees and charges that may have obscured the true price of a product or service. To address this, the CFPB is seeking public input in a Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products or Services. This information will be used by the agency to help shape upcoming rulemaking and guidance agenda to financial firms. Comments can be made in the RFI linked above and are due by March 31st, 2022.
Access the initial press release here: https://www.consumerfinance.gov/about-us/newsroom/consumer-financial-protection-bureau-launches-initiative-to-save-americans-billions-in-junk-fees/.
Want to know more? Join the discussion by calling (831) 325-3369 or contact info@firstlinecompliance.com.