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CFPB seeks public feedback on excessive fees
The CFPB Wednesday issued a request for information (RFI) regarding fees on consumer financial products and services, or 'junk fees.' The RFI will assist the bureau and policymakers in exercising "enforcement, supervision, regulatory, and other authorities to create fairer, more transparent, and competitive consumer financial markets."
In the RFI, the CFPB explains that a junk fee includes resort fees at hotels and service fees added to concert ticket prices, for example. For financial institutions, the bureau believes a junk fee includes penalty and late fees, nonsufficient funds fees, minimum balance fees, and fees for paper statements. The bureau is also interested in hearing from small business-owners, non-profit organizations, as well as state and local government officials.
“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” said Chopra. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”
Of note, the CFPB is interested in hearing from the public about 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; and
- fees where it was unclear why they were charged.
NAFCU along with other credit union and banking trade groups responded to the RFI stating that the CFPB's initiative “paints a distorted and misleading picture of our country's highly competitive financial services marketplace.”
The group also mentioned that there are many federal laws as well as the bureau’s own rules that “already require banks, credit unions, and other providers of consumer financial services to disclose terms and fees in a clear and conspicuous manner.”
Comments are due to the CFPB March 31. NAFCU will review the RFI and solicit member feedback on this topic to ensure the credit union industry's voice is heard.