Over the past few months, the Consumer Financial Protection Bureau (CFPB) has
made it clear it intends to target banks ability to
charge “junk fees” to consumers. In preemption of any rule making and enforcement actions by the CFPB, a number of banks announced
the removal, or planned removal, of nonsufficient fund (NSF) and overdraft fees.
In a recent statement from the CFPB, the bureau has continued its ongoing criticism of the practice by banks of charging overdraft and nonsufficient fund fees. The statement offers a note of praise to the banks that have ending the practice of charging these fees, which the CFPB estimates will save consumers about $1 billion annually.
The bulk of the statement, however, focuses on the perceived harms that NSF and overdraft fees cause to consumers.
“Consumers receive no service at all in exchange for this fee,” the CFPB statement read. “Indeed, NSF fees intensify financial distress for consumers, who often are already at their financial edge and who will often also be hit by the fee merchants charge when a consumer’s payment bounces. NSF fees average $34 each, even as any marginal cost to the institution to return a payment is likely exceedingly low. The Bureau is closely scrutinizing whether and when charging these fees may be unlawful.”
The CFPB plans to continue its monitoring of banks that engage in these types of fees and hopes to save American consumers billions of dollars in its initiatives to eliminate “junk fees” being issued financial institutions.