Decoding the CFPB's Recent Report: An Examination of "Junk Fees" and Their Impact on Consumers

Episode notes

In this episode of Payments Pros, Keith Barnett and Carlin McCrory discuss the Consumer Financial Protection Bureau's (CFPB) fall supervisory highlights, focusing on "junk fees." The report covers examinations in areas of deposits, auto servicing, and remittances completed between February and August 2023. The recent report reveals that their efforts have resulted in institutions refunding more than $140 million to consumers. The report primarily focuses on deposits as an area of supervisory observations. Keith and Carlin also note that the report discusses CFPB identifying unfair practices by financial institutions, which have been charging consumers representment nonsufficient funds (NSF) fees without providing an opportunity to prevent additional fees after the first failed attempt. According to the CFPB, some institutions have used incomplete data that failed to capture all instances of representment NSF fees charged to consumers. The CFPB is currently seeking comprehensive reporting on when consumers were charged multiple representment fees and ensuring proper reimbursement.

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