Biden Administration, CFPB, and the FTC announce new actions to protect consumers from junk fees
This information was sourced from an email sent out by the CFPB, there may be additional details they did not mention in their announcement.
Yesterday, President Biden was joined by Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra and Federal Trade Commission (FTC) Chair Lina Khan as they announced new efforts to crack down on junk fees and bring down costs for American consumers. Junk fees are hidden, surprise fees that companies sneak onto customer bills, increasing costs and stifling competition in industries across the economy.
You can watch the livestream here…
CFPB issues guidance to halt large banks from charging illegal junk fees for basic customer service
CFPB issued an advisory opinion today regarding a provision enacted by Congress which generally prohibits large banks and credit unions from imposing unreasonable obstacles on customers, such as charging excessive fees, for basic information about their own accounts. The CFPB also released a special edition of its Supervisory Highlights today that focused on the agency’s efforts to protect consumers from illegal junk fees. The junk fees discussed in the report – including fees for fake paper statements and worthless add-on products for auto loans – can strain the financial stability of even the most financially savvy families.
As a result of the CFPB’s supervisory work, the companies in today’s report are refunding $140 million to consumers, $120 million of which is for surprise overdraft fees and double-dipping on non-sufficient funds fees. A separate report finds that most financial institutions have eliminated non-sufficient funds fees, saving consumers an estimated $2 billion every year.
The CFPB does not intend to seek monetary relief for potential violations of Section 1034(c) that occur prior to February 1, 2024.
Consumers can submit complaints about junk fees and about financial products and services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
About the Bureau
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.
Learn more at consumerfinance.gov.