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NAFCU, trades submit feedback to CFPB on transparency regarding ‘junk fees’
NAFCU joined with other trade associations Monday to submit feedback to the CFPB on their request for information (RFI) regarding fees on consumer financial products and services, or "junk fees." The bureau intends to use responses from the RFI to help with "enforcement, supervision, regulatory, and other authorities to create fairer, more transparent, and competitive consumer financial markets."
The groups mentioned their previous work with the CFPB on numerous rulemakings to advance transparency of fees and consumers’ understanding of those fees; however, they noted that the RFI does not discuss the “significant work that both the CFPB and financial institutions have undertaken to advance consumer understanding of the cost of consumer financial products and services” - an essential addition to any initiative.
The groups gave the bureau a detailed list of concerns in their letter, including:
- the bureau must consider the current regulatory regime and significant body of existing data concerning consumer understanding of consumer financial products and services;
- fees in the consumer financial services market are subject to significant disclosure requirements intended to promote consumer choice and competition;
- the RFI fails to consider the bureau’s extensive research and previous rulemaking to assess and advance consumer understanding of fees; and
- any policy interventions must be grounded in the bureau’s authority.
“The CFPB is charged with ensuring that ‘consumers are provided with timely and understandable information to make responsible decisions about financial transactions,’” concluded the groups. “If the CFPB now asserts that its past rulemaking efforts have failed to achieve that objective, it must square that assertion with the actual evidence, much of which is already available to the CFPB.
“If, based on such evidence, the CFPB determines that policy intervention may be warranted, it should proceed in a fair and impartial manner, grounded in its authority, and in coordination with other relevant agencies,” added the groups.
Read the full letter. NAFCU last week wrote a letter submitting feedback to the RFI mentioning that the bureau’s mischaracterization of fees in the financial services as “junk fees,” “excessive or exploitative fees,” or “inflated or surprise fees,” confuses consumers. In addition, the letter urged the bureau to conduct further analysis on the markets and products listed in the RFI before taking any supervisory or regulatory action. The association will keep members aware of any developing actions from the CFPB.