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More Rules on Fees in the Works

Authored By: Lewis Wood on 10/26/2022

Credit unions: The Biden Administration today released an initiative that will target what it terms “junk fees,” with banking-related fees featured prominently in the President’s plan and in new, related guidance issued by the Consumer Financial Protection Bureau (CFPB).

Of note for credit unions:

  • Releases from both the White House and the CFPB spotlight some banking fees as examples of what they term “junk fees.”
    • CFPB’s circular highlights surprise fees, like fees for depositing a check that bounces or charging an overdraft fee after a member had a sufficient available balance at the time of purchase.
    • The White House release lists overdraft fees as an example of “junk fees.”
  • Credit unions should review the CFPB news release and circular in relation to their procedures and fee structures. The CFPB provides examples of practices and procedures that could be subject to the general authority it exercises relative to Unfair Deceptive Abusive Acts and Practices (UDAAP). This circular is not a regulation but if used as such, could be the subject of future litigation. The CFPB indicated there will be regulation coming on fees.
  • CFPB has a history of using its UDAAP Authority to come down hard on what it views as discriminatory practices, and all credit unions, regardless of asset size, should be cognizant of this fact.

Related: The President’s Initiative on Junk Fees and Related Pricing Practices (White House Release)
Related: CFPB Issues Guidance to Help Banks Avoid Charging Illegal Junk Fees on Deposit Accounts (CFPB Guidance)
Related: CFPB Targets 'Junk' Fees with White House Backing (American Banker subscription may be required.)
Related: NAFCU's Berger Warns Against Latest CFPB Fees Guidance

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