Reduction of “junk fees” charged by banks and financial companies is the aim of an initiative announced Wednesday by the consumer financial protection agency.
The aim, according to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, is to “save Americans billions of dollars” in the fees charged by the companies. The agency announced a request for public comment for input that would help shape the agency’s rulemaking and “guidance agenda,” including future enforcement priorities.
In a release, the bureau said its research has found areas where back-end fees (such as “resort fees” and “service fees”) obscure the “true cost” of a product and undermine a competitive market. Two examples the agency provided include more than $14 billion in “punitive” late fees charged by major credit card companies in 2019 and more than $15 billion in overdraft and non-sufficient funds (NSF) fees charged that same year.
The bureau said its aim is to strengthen competition in consumer finance by using its authorities to reduce those “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,” the agency said. “Public comments provide valuable insights that allow the CFPB to target the most pressing needs and concerns, including uncovering potential illegal practices or fees.”
The agency said it wants to learn about people’s experiences with fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers. Those include:
- 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.