WASHINGTON—The Consumer Financial Protection Bureau’s guidance on “junk fees” issued last week raises several concerns over the treatment of financial institution fees, according to CUNA.
The CFPB said it position is the overdraft and depositor fees likely violate the Consumer Financial Protection Act prohibition on unfair practices when consumers cannot reasonably avoid them. The White House also issued a statement in conjunction with the CFPB’s guidance calling on “all agencies to reduce or eliminate hidden fees, charges, and add-ons for everything from banking services to cable and Internet bills to airline and concert tickets.”
“Credit unions are the original consumer protectors, but we have strong concerns about the White House and CFPB’s classification of certain financial services fees as ‘junk fees.’ Credit unions offer these services as a member accommodation and benefit and design their programs to meet the needs oof their individual memberships,” said CUNA President/CEO Jim Nussle in a statement. “Credit unions have a strong history of working with members to solve issues and the CFPB’s guidance creates new expectations without the benefit of a comment period or stakeholder feedback.”
‘Americans Don’t Agree With President’
President Joe Biden said during his remarks the administration is making clear “surprise overdraft fees” are illegal.
“While President Biden thinks overdraft fees are criminal—130 million credit union members view this service as an essential lifeline that helps keep them out of the grips of unregulated, predatory providers that charge exponentially higher prices for similar services,” Nussle added.
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