Publication | BRG
Paul Noring, Vincent Urbancic, Michael Canale, and John DelPonti
On January 26, 2022, Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra issued prepared remarks on junk fees, which were followed by a formal request for information (RFI) filed in the Federal Register on February 2. Director Chopra stated:
In many cases, junk fees often act as penalties, like with non-sufficient funds and credit card late fees, rather than compensation for a legitimate service. While it may make sense for banks to pass on the cost for extra services provided, many complain that these fees are far higher than the service is really worth.
Based on these developments, BRG’s Financial Institution Advisory professionals believe that there is a high probability for increased enforcement actions and new rules regarding the permissibility, frequency, and reasonableness of fees charged to consumers based on what the CFPB expects the RFI will result in.