The Consumer Financial Protection Bureau on Wednesday announced plans to crack down on hidden fees charged by banks and financial institutions.
The CFPB issued a request for information and is seeking the public’s input on fees that they don’t think are fair. It is targeting fees that are not included in the advertised price of a transaction, for example, when people are charged “resort fees” or “service fees” after the fact.
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“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” said CFPB Director Rohit Chopra. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”
The CFPB said it is interested in hearing from the public about fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers.
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The watchdog said it wants feedback 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 for which it was unclear why the customer was charged.
In addition to consumers, the CFPB is seeking input 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.
Financial institutions are already pushing back on the watchdog’s initiative. A group of eight trade groups, including the American Bankers Association, issued a joint statement Wednesday that calls the request for information “misguided” and said it paints a “distorted and misleading picture” of the financial services marketplace.
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“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,” the statement reads. “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.”
The public comment period for the new initiative ends March 31.
