On 1/26/2022, the CFPB launched an initiative to save households billions of dollars a year by reducing exploitative junk fees charged by banks and financial companies. This initiative will give the public a chance to share their input in crafting the agency’s rulemaking and guidance agenda, as well as its enforcement priorities in the coming months and years.
According to the CFPB’s release, companies across the U.S. economy are increasingly charging inflated and back-end fees to households and families by concealing 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.
Given these problems, the CFPB seeks input from the public to be able to craft rules, issue industry guidance, and focus supervision and enforcement resources that will strengthen competition in consumer finance. To achieve this, the agency would like to hear 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
In addition, the bureau is also interested in hearing 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.
Read the CFPB’s announcement here.
The CFPB’s request for information can be found here.
