CFPB continues to focus on fees

If you’ve been following credit union compliance issues during the past 2 years, then you’ve no doubt heard about the effort by the Consumer Financial Protection Bureau (CFPB or bureau) to combat what they’ve dubbed to be “junk fees.” NAFCU disagrees with the “junk fee” label, especially when applied to fees charged by member-owned not-for-profit credit unions. Nevertheless, from a compliance perspective, credit unions should pay attention to the bureau’s activity regarding junk fees, as there can be implications for a credit union’s operations. Junk fees are considered by the bureau to be unfair, deceptive or abusive acts or practices (UDAAP), and therefore a violation of federal law. Let’s review the CFPB’s recent Fall 2023 Supervisory Highlights and how that fits into the broader picture of this war on fees:

Re-presented NSF fees

First, the publication discusses re-presented nonsufficient funds (NSF) fees. These fees arise when an NSF fee is charged because a transaction fails due to insufficient funds, and later the transaction is tried again (i.e. re-presented) and another NSF fee is charged because the funds are still insufficient. As discussed in this previous post in the Compliance Blog, the CFPB focused on these fees earlier this year in their Spring 2023 Supervisory Highlights, as well as in an enforcement action against Bank of America. In its most recent publication, the bureau notes that disclosing these fees in the account opening disclosures is not enough to prevent these fees from being labelled junk fees:

“These injuries were not reasonably avoidable by consumers, regardless of disclosures in account-opening documents, because consumers did not have a reasonable opportunity to prevent another fee after the first failed presentment attempt.”


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