WASHINGTON – While the credit union trade groups have been critical of new announcements by the Biden Administration that seek to crack down on junk fees, consumer groups are praising the crackdowns.
As CUToday.info has reported, the Federal Trade Commission (FTC) has issued a proposal on junk fees imposed by many businesses, including landlords, while the Consumer Financial Protection Bureau (CFPB) has issued guidance prohibiting bank fees for consumers to obtain basic information about their own accounts.
‘Applause’ for FTC
“We applaud the FTC for its proposed rule addressing hidden and misleading fees and for specifically focusing on junk fees in the rental housing context,” said Ariel Nelson, staff attorney at the National Consumer Law Center. “We have seen unfair and exorbitant rental junk fees across the rental market, and we appreciate the FTC for taking a first step to curb this predatory practice. By requiring an ‘all-in’ price tag, the FTC will prevent surprise fees that disguise the true cost of housing. We urge the FTC to ultimately enact a rule that also prohibits the imposition of certain junk fees that put safe and decent housing even more out of reach for millions of low-income renters.”
‘Too Damn High’
The NCLC said its recent report, Too Damn High: How Junk Fees Add to Skyrocketing Rents, analyzed the “pervasive nature” of junk fees in the rental housing market and made policy recommendations to minimize the harm to renters.
“The report found that in addition to sky-high rent prices, a number of junk fees, including pet fees, deposits, pest control fees, valet trash fees, and even a ‘January fee’ are contributing to the affordable housing crisis,” the NCLC said. "Junk fees add to the already heavy burden that exorbitant rents place on renters, with over 40% of renter households—19 million households—in the United States being “cost burdened,” i.e., paying over 30% of their income on housing costs.
No More ‘Statement Copy Fees’
“The CFPB guidance will prevent those $5 ‘statement copy fees’ and similar charges that banks charge consumers to get back statements or other account information,” said Chi Chi Wu, senior attorney at NCLC. “This will save consumers some of their hard-earned money, something the CFPB has excelled at these past two years.” The CFPB guidance also makes clear that banks must respond promptly to consumer requests for information such as a loan payoff balance or copy of their account agreement.
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