CFPB Updates Guidance on 'Junk Fees'
What are Junk Fees?
The Consumer Financial Protection Bureau (CFPB) has recently issued a new issue of Supervisory Highlights titled "Junk Fees Update." Junk fees are fees that are charged to consumers for unnecessary or unavoidable services, and they can add up over time to a significant amount of money.
Examples of Junk Fees
Some common examples of junk fees include:
- Overdraft fees
- Non-sufficient funds (NSF) fees
- Late payment fees
- ATM fees
- Foreign transaction fees
CFPB Guidance on Junk Fees
The CFPB has released several pieces of guidance on junk fees, including a special edition of Supervisory Highlights in October 2023. This guidance provides banks and other financial institutions with information on how to comply with the law and avoid charging excessive junk fees.
CFPB Enforcement Actions
The CFPB has also taken enforcement actions against companies that have engaged in deceptive or unfair practices related to junk fees. In one recent case, the CFPB ordered a bank to refund over $100 million in overdraft fees to customers.
Consumer Protection
The CFPB's guidance and enforcement actions are designed to protect consumers from being overcharged for financial services. Consumers should be aware of the different types of junk fees and take steps to avoid them whenever possible.
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