WASHINGTON— Concerns over the CFPB’s “efforts to demonize commonsense incentives that promote financial responsibility” have been expressed by Republican members of the Senate Banking Committee in a letter to the Director Rohit Chopra.
The letter was sent as the Bureau prepares to issue guidance and rulemakings to limit what it has deemed “junk fees,” including overdraft fees and credit card late fees.
In their letter, the senators argue these fees are detailed up front in the terms of financial agreements, and “are used for a variety of legitimate purposes, including encouraging consumers to make responsible financial decisions such as balancing their checkbooks and discouraging consumers from paying their bills late.”
“These fees also enable companies to offset the costs of late payments and their associated risks so that they can continue to offer the financial products that people want and need, particularly to the financially vulnerable and those who are trying to build credit,” the letter continues. “The CFPB’s efforts to eradicate responsible financial incentives under the guise of consumer aid is deceptive and should have no place in the United States Government.”
Junk Fees Initiative
As CUToday.info reported, in January 2022, the Bureau launched its “junk fees” initiative, and since then has released guidance related to overdraft fee assessment and a proposed rule to restrict the safe harbor for credit card late fees, NAFCU noted.
The letter goes on to call for the CFPB to rescind the credit card late fees proposal.
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