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Senators urge CFPB to stop ‘deceptive’ efforts on fees
As the CFPB moves forward with guidance and rulemakings to limit what it has deemed “junk fees,” including overdraft fees and credit card late fees, Republican members of the Senate Banking Committee wrote to CFPB Director Rohit Chopra to share concerns – which have also been raised by NAFCU – about its “efforts to demonize commonsense incentives that promote financial responsibility.”
NAFCU is leading the charge against the bureau’s regulatory overreach. NAFCU President and CEO Dan Berger recently wrote an op-ed in RealClear Markets urging congressional leaders to hold the CFPB accountable and end the bureau’s “war against Main Street.”
In their letter, the senators explained that these fees are detailed up front in the terms of financial agreements, and “are used for a variety of legitimate purposes, including encouraging consumers to make responsible financial decisions such as balancing their checkbooks and discouraging consumers from paying their bills late.”
“These fees also enable companies to offset the costs of late payments and their associated risks so that they can continue to offer the financial products that people want and need, particularly to the financially vulnerable and those who are trying to build credit,” they wrote. “The CFPB’s efforts to eradicate responsible financial incentives under the guise of consumer aid is deceptive and should have no place in the United States Government.”
In January 2022, the bureau launched its “junk fees” initiative, and since then has released guidance related to overdraft fee assessment and a proposed rule to drastically restrict the safe harbor for credit card late fees, which Berger said “amounts to financial chaos.”
The letter goes on to call for the CFPB to rescind the credit card late fees proposal. NAFCU has a new grassroots advocacy campaign for credit unions to join the fight against the bureau’s misguided proposal on credit card late fees. NAFCU’s Grassroots Action Center has letters for credit unions to send directly to the CFPB detailing the detrimental impact this proposal will have on credit unions and their 135 million members. The association will also submit a comment letter with member feedback to the bureau by the May 3 deadline.
Additional details on the proposal can be found in NAFCU’s Regulatory Alert.