CFPB Releases Blog Seeking Comment on Hidden Cost of “Junk Fees”
On February 2, 2022, the Consumer Finance Protection Bureau (“CFPB”) released a blog regarding fees consumers incur as a byproduct of engaging in the consumer finance sector, which is regulated by the CFPB.
The blog is a furtherance of the CFPB's prior request for information issued on January 26, 2022, concerning mandatory “hidden” fees that providers of financial industry goods and services tack on to the good or service having a “set price” at the time of decision.
Examples of such fees are as follows:
late fees, overdraft fees
non-sufficient funds (NSF) fees
convenience fees for processing payments
minimum balance fees
return item fees
stop payment fees
check image fees
fees for paper statements
fees to replace a card
fees for out-of-network ATMs
foreign transaction fees
ACH transfer fees
wire transfer fees
account closure fees
inactivity fees
fees to investigate fraudulent activity
ancillary fees in the mortgage closing process
The purpose of the CFPB's requests was out of concern that consumers were not properly informed of these costs and had no mechanism with which to avoid them if they needed the good or service the institution was providing, which also serves as a basis for the CFPB's recent push to remove overdraft fees on consumer accounts.
The CFPB has requested that “stakeholders” in the consumer finance marketplace, such as individuals, small business owners, academics, and government officials, share their experiences with the following:
Fees for things you 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 you were charged
The CFPB’s comment period ends on March 31, 2022, and the comments received may be used to establish new regulatory guidance or legislative efforts regarding these types of fees. Financial institutions may provide comment and insight on these matters and potentially influence the regulatory agenda. Financial institutions should also review the responses, to remain apprised of the public response and sentiment to these types of fees.