CU Trades Call CFPB's Account Fees Request for Information 'Misguided'
The bureau wants public input on what it calls “junk fees” imposed by banks and credit unions.
On Wednesday, the CFPB posted a request for public input on product and service fees charged by banks, credit unions and other financial institutions. According to a statement released by the CFPB, the bureau considers many of the fees to be “exploitative junk fees” that appear to have created a “fee economy.”
CFPB Director Rohit Chopra said, “Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees. By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”
Soon after the CFPB made the announcement, CUNA, NAFCU and other trade organizations from the banking industry pushed back on the CFPB for appearing to base the request on misleading information.
A joint statement issued by CUNA, NAFCU the American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Independent Community Bankers of America and the Financial Services Forum read, “The CFPB’s new Request for Information on fees is a misguided effort that paints a distorted and misleading picture of our country’s highly competitive financial services marketplace. Multiple federal laws and the CFPB’s own rules already require banks, credit unions and other providers of consumer financial services to disclose terms and fees in a clear and conspicuous manner, and our members do so each and every day. Consumers in this country know they have a wide range of choices when it comes to financial services products, and those businesses compete every day, including on fees. We look forward to responding to this Request for Information with facts and perspective sadly lacking from today’s announcement.”
In Wednesday’s announcement, the CFPB appeared to at least partially base the Request for Information on the bureau’s own research, which found:
- In 2019, the major credit card companies charged over $14 billion each year in punitive late fees.
- In 2019, bank revenue from overdraft and non-sufficient funds fees surpassed $15 billion.
Over the past several months, more than a dozen credit unions, as well as the large banks, Bank of America and Wells Fargo, announced the elimination and reduction of overdraft and non-sufficient fund fees.
The CFPB stated that it is interested in hearing from consumers about their experiences with fees from credit unions, banks, credit card accounts, mortgages or other items, such as:
- “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.
- “Fees where it was unclear why they were charged.”
According to the CFPB, comments on the issue must be received on or before March 31, 2022.