The Consumer Financial Protection Bureau (CFPB) launched an initiative designed to reduce “junk fees” charged by banks and financial companies.
The bureau says that companies are increasingly charging inflated and back-end fees that conceal the true price of products. CFPB officials cite resort fees and service fees that certain hotels and concert venues charge, respectively, as examples. Some companies charge fees for things like paperwork processing, which can inflate the actual cost of that service.
Some of these fees exist in the financial industry as well, CFPB officials said.
“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” CFPB Director Rohit Chopra said. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”
In its research, CFPB found that major credit card companies charged over $14 billion each year in punitive late fees. It also found that, in 2019, bank revenue from overdraft and non-sufficient funds (NSF) fees surpassed $15 billion.
To craft rules, issue industry guidance, and focus supervision and enforcement resources to reduce these junk fees, the CFPB is seeking input from the public. Public comments will provide insight that enables the CFPB to target the most pressing needs and concerns, including uncovering potential illegal practices or fees.
The CFPB is interested in hearing about people’s experiences with fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers. Specifically, they are looking for insights on 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.
The CFPB is also interested in hearing from small business owners, non-profit organizations, legal aid attorneys, academics and researchers, state and local government officials, and financial institutions, including small banks and credit unions.