(RepublicanPress.org) – In September 2022, President Joe Biden made remarks at the third meeting of the White House Competition Council. During the gathering, he discussed the impact “unnecessary hidden fees” — also known as junk fees — were having on American families, cutting into already tight budgets. Biden mentioned overdraft fees, termination charges, and processing fees are nickel and diming families to the point that they are having a hard time making ends meet. He suggested people shouldn’t have to pay such fees and vowed to start setting businesses that charge them straight. On October 11, the Consumer Financial Protection Bureau (CFPB) released a report detailing its recent actions to eliminate junk fees.
What Did It Say?
The CFPB said it launched an initiative to examine junk fees charged to consumers by the banking industry and other financial institutions. While overseeing these companies, the organization said these entities are refunding more than $120 million back to families charged with surprise overdraft fees and non-sufficient funds (NSF) charges. The supervisor in charge reported that the total amount refunded overall reaches over $140 million.
The report covers the period between February and August, looking at fees charged against deposit accounts, auto loans, and remittances. CFPB said it found that companies were charging customers fees to receive paper bank statements, unnecessary add-on products for car loans that were already paid off, and hidden fees related to international money transfers. Once the organization finds a fee problem, the examiners bring the issue to the company’s attention so it has a chance to remedy the situation. While the organization didn’t mention any banks specifically, it did say many financial institutions have voluntarily moved away from the business model of depending on fees for income. Others have not. CFPB estimated that the policy changes would save Americans more than $2 billion per year.
Related Actions Regarding Fees
CNBC mentioned that the CFPB previously took action against Bank of America and Wells Fargo for charging junk fees. BoA had to pay $150 million in penalties to the bureau and about $80 million to customers. That figure was in addition to the $23 million it already paid to consumers. A spokesman for the company said Bank of America “voluntarily reduced overdraft fees” and eliminated other fees, reducing its revenue from those charges by 90%.
The White House mentioned that not only is the CFPB addressing the junk fees issue, but so are the Federal Trade Commission, the Department of Housing and Urban Development, and the Department of Transportation. The announcement also stated that companies in the private sector are also following suit.
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