We talked about it before…the CFPB does not like what they consider to be “junk fees.” In fact, the CFPB went even more on the offensive in October.
On October 11th, the CFPB issued a Special Edition of its Supervisory Highlights (Report), to focus on the work done so far on its junk fees “initiative”. The Report touched on the ongoing issues related to assessing multiple non-sufficient funds (NSF) fees on a single transaction, acknowledging the key role core processors play.
Also discussed was the practice of charging fees for paper statements and/or undeliverable mail, even when a statement was not mailed. Fees for returned deposit items were also touched upon again.
While much of what was discussed are things we’ve heard before, you should consider this Report an additional “warning shot”. But, that wasn’t all:
- The CFPB issued a Data spotlight based on its analysis of the NSF fee practices of several financial institutions.
- An Advisory Opinion was also issued by the CFPB to specifically remind large institutions of their requirement to respond to customer requests for information in a timely fashion and express concern that customers are being charged for “basic” account information.
- CFPB Director Chopra chimed in against junk fees and indicated that the CFPB plans to move forward with the Section 1033 rulemaking later this month, which will make it easier for consumers to change banks and ultimately avoid junk fees.
- While not the CFPB, the Federal Trade Commission also proposed a Rule looking to end “hidden and bogus fees”. This would reach well beyond financial institutions and apply to all businesses.
Be sure to check out the upcoming issues of Banking on BCC where we will go into each of these in more detail.
Published
2023/10/18
