CFPB Extends Request for Information on Convenience Fees

CFPB logoThe bureau is seeking consumer and business input on bank account and credit card fees, plus other financial products by new April 11 deadline.

03/25/2022 11: 00 A.M.

3 minute read

The Consumer Financial Protection Bureau continues to seek comments from the public and businesses related to fees that are not subject to competitive processes that ensure fair pricing, having received more than 25,000 since it opened the comments in January. As a result of the feedback thus far, the bureau extended the deadline for comments from March 31 to April 11.

The public comments will serve to assist the CFPB and policymakers in exercising its enforcement, supervision, regulation and other authorities to create fairer, more transparent and competitive consumer financial markets, according to the request for information (RFI.)

The CFPB has found several areas where back-end fees might obscure the true cost of a product and undermine the competitive market, according to a news release:

  • In 2019, major credit card companies charged over $14 billion each year in punitive late fees.
  • In 2019, bank revenue from overdraft and non-sufficient funds (NSF) fees surpassed $15 billion.

The request for information is a chance for the public to share input that will help shape the agency’s rulemaking and guidance agenda, as well as its enforcement priorities in the coming months and years, according to the bureau’s news release.

The Consumer Financial Protection Act directs the CFPB to enforce federal consumer law for the purpose of ensuring consumer financial markets are fair, transparent and competitive, according to the RFI.

“The CFPB has grown increasingly concerned that consumer finance has become part of this ‘fee economy,’” it states. “Exploitative junk fees charged by banks and non-bank financial institutions have become widespread, with the potential effect of shielding substantial portions of the true price of consumer financial products and services from competition. The CFPB is concerned about fees that far exceed the marginal cost of the service they purport to cover, implying that companies are not just shifting costs to consumers, but rather, taking advantage of a captive relationship with the consumer to drive excess profits. Excessive and exploitative fees, whether predictable and transparent to the customer or not, can add up and pose significant costs to people, especially those with low wealth and income.”

Among the examples of fees outlined in the RFI, the CFPB notes that financial institutions charge “convenience” fees on payment transfers, return item fees, stop payment fees, check image fees, online or telephone bill pay fees, ACH transfer fees, and wire transfer fees. International transfers are subject to a significant number of fees as well. In 2017, the CFPB issued a compliance bulletin on unfair, deceptive, and abusive acts or practices relating to fees for making payments over the telephone, and potential violations of the Fair Debt Collection Practices Act. These kinds of convenience fees are still common.

The bureau is interested in comments on fees associated with consumers’ bank, credit union, prepaid or credit card account, mortgage, loan or payment transfers.

The CFPB is also interested in hearing from small-business owners, nonprofit organizations, legal aid attorneys, academics and researchers, state and local government officials, and financial institutions, including small banks and credit unions.

Comments are due by April 11. The CFPB’s Federal Register notice is available here.

Submit comments, identified by docket number CFPB-2022-0003, by any of the following methods:

  • Electronic: http://www.regulations.gov. Include the document title (Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products or Services) and docket number CFPB-2022-0003
  • Email: [email protected]. Include docket number CFPB-2022-0003 in the subject line of the message.
  • Mail/Hand Delivery/Courier: Comment Intake —Fee Assessment, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, D.C., 20552. Please note that due to circumstances associated with the COVID-19 pandemic, the CFPB discourages the submission of comments by hand delivery, mail or courier.

ACA International is reviewing the RFI to submit comments to the bureau on the accounts receivable management industry’s behalf. Please send questions or information to Leah Dempsey, Vice President and Senior Counsel, at [email protected].

If you have executive leadership updates or other member news to share with ACA, contact our communications department at [email protected]. View our publications page for more information and our news submission guidelines here.

   

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