The Consumer Financial Protection Bureau has issued guidance about “junk fees,” targeting two practices that it believes are “likely unfair and unlawful under existing law.”
The CFPB has its sights set on “surprise overdraft fees” such as those that occur when customers have sufficient funds to cover a debit charge at the time the bank authorized it. Regions Financial in Birmingham, Ala., recently agreed to a $191 million settlement tied to a similar practice.
The bureau also highlighted practices that “indiscriminately” charge fees to “every person who deposits a check that bounces.” The CFPB said the penalty is “an unexpected shock to depositors who thought they were increasing their funds.”
The CFPB said those fees likely violate the Consumer Financial Protection Act.
“Americans are willing to pay for legitimate services at a competitive price, but are frustrated when they are hit with junk fees for unexpected or unwanted services that have no value to them,” CFPB Director Rohit Chopra said in a press release.
“We are providing guidance on existing law that will help law-abiding businesses seeking to fairly compete and the families they serve,” Chopra added.