Freedom From Junk Fees
Overdraft charges, credit card late fees targeted by Consumer Bureau
The Consumer Financial Protection Bureau (CFPB) is living up to its promise by tackling the expensive and annoying junk fees charged by Big Banks.
Big Banks Being Bad
When it comes to overdraft fees, the CFPB has proposed a maximum fee of $14, compared to the current standard of $35.
“Banks should not be allowed to harm families by hiding their costs in back-end junk fees,” said Carla Sanchez-Adams, senior attorney at the National Consumer Law Center. “We strongly support the proposed rule, which will provide consumers with needed financial relief and help to restore trust in big banks.”
For credit card late fees, the proposed cap is $8. CFPB research has found $8 is the actual cost of recouping any losses from late payments and that the typical late payment is less than two days late.
“For over a decade, credit card giants have been exploiting a loophole to harvest billions of dollars in junk fees from American consumers,” said CFPB Director Rohit Chopra. “Today's rule ends the era of big credit card companies hiding behind the excuse of inflation when they hike fees on borrowers and boost their own bottom lines."
A CFPB report in early 2023 noted that consumers paid $14.5 billion in late fees in 2022.