The Consumer Financial Protection Bureau (CFPB) has launched an initiative to save households billions of dollars a year by reducing exploitative junk fees charged by financial companies and banks.
“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” said CFPB Director Rohit Chopra. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”
A release from the CFPB notes that companies across the U.S. economy are increasingly charging inflated and back-end fees to households and families, fees that conceal the true price of products from the competitive process.
The CFPB’s research has found several areas where back-end fees might obscure the true cost of a product and undermine a competitive market:
- In 2019, the major credit card companies charged over $14 billion each year in punitive late fees.
- In 2019, bank revenue from overdraft and non-sufficient funds (NSF) fees surpassed $15 billion.
The CFPB will strive to strengthen competition in consumer finance by using its authorities to reduce these kinds of junk fees. To craft rules, issue industry guidance, and focus supervision and enforcement resources to achieve this goal, the CFPB is seeking input from the public. Comments submitted by the public will provide insight to the CFPB in crafting a final rule on these fees.
The CFPB is interested in hearing about people’s experiences with fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers, including:
- Fees for things people believed were covered by the baseline price of a product or service.
- Unexpected fees for a product or service.
- Fees that seemed too high for the purported service.
- Fees where it was unclear why they were charged.
The CFPB is seeking comments from small business owners, non-profit organizations, legal aid attorneys, academics and researchers, state and local government officials, and financial institutions, including small banks and credit unions.
The CFPB is seeking comments, identified by Docket No. CFPB-2022-0003, by any of the following methods:
- Electronic: http://www.regulations.gov. Follow the instructions for submitting comments.
- Email [email protected] and include Docket No. CFPB-2022-0003 in the subject line of the message.
- Mail/hand delivery/courier: Comment Intake—Fee Assessment, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, D.C. 20552.