CFPB Shines a Spotlight on Junk Fees in Bank Deposits, Lending Markets

  • The CFPB issued a special edition of its Supervisory Highlights focusing on illegal, unnecessary charges by banks and other financial companies sometimes referred to as “junk fees.”
  • The Supervisory Highlights describes a rise in illegal junk fees in certain industries: bank deposits, auto servicing, mortgage servicing, payday and small-dollar lending, and student loan servicing. The Bureau explains that targeting the illegal fees is a priority because they can adversely affect family finances and increase borrowing costs and cannot be easily avoided by consumers.
  • This is the latest effort by the CFPB in its ongoing fight against illegal and predatory fees. As previously reported, the CFPB also issued an Advisory Opinion affirming the agency’s position that federal law generally prohibits debt collectors from imposing “convenience fees” on consumers making payments. Additionally, the CFPB has initiated a public inquiry aimed at reducing exploitative fees charged by banks and financial companies.