CFPB proposes to ban NSF fees on transactions denied in real time
The CFPB contends they are 'junk fees'
The Consumer Financial Protection Bureau on Wednesday proposed to ban credit unions and banks from imposing non-sufficient funds fees (NSF) on transactions that they deny in real time. The proposal would include declined debit card purchases and ATM withdrawals, as well as some declined peer-to-peer purchases.
Agency officials conceded that most financial institutions do not charge such fees, but said they wanted to make it clear that such charges would be considered unfair, deceptive or abusive acts or practices if they were imposed.
“The CFPB is taking proactive steps to ensure that financial institutions do not impose these fees, which can occur for a host of reasons that are out of the consumer’s control,” the CFPB said. “Specifically, as technology advances, financial institutions may be able to decline more transactions right at the swipe, tap, or click.”
CFPB Director Rohit Chopra said the agency was proposing the rule to warn financial institutions that they should not begin charging such fees.
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