CFPB to Consumers: Tell Us About ‘Junk Fees’


Read more at the Washington CU Daily

The Consumer Financial Protection Bureau is directly appealing to consumers to provide details about so-called “junk fees” they have been charged by financial services providers.

The CFPB has produced a 1:10 minute YouTube video asking people to submit comments on fees they have been charged by credit unions, banks and other financial companies.

The agency last week said that it was soliciting comments on the fees until the end of March, saying that they are concerned that the fees far exceed the marginal cost of the services provided.

“Junk fees drain tens of billions of dollars per year from Americans’ budgets, and when markets become dependent on these back-end fees, it makes it harder for families to realize the benefits of competition,” the CFPB said in an article posted on the agency’s blog asking for public comments.

In explaining what types of information, they are seeking, agency officials listed several types of fees that could be considered “junk,” including:

  • Fees for not having enough money. The cost of signing up for a bank account is generally listed as account maintenance fees. However, agency officials said, the vast majority of fee revenue that banks make from deposit accounts comes from back-end penalties for overdrafts or not having enough funds to cover a transaction.
  • Late fees. These fees are penalties for not paying a bill by the due date. The CFPB said that of the $23.6 billion in fees charged by card issuers in 2019, $14 billion came from late fees.
  • Fees to pay bills. Banks commonly charge fees to accept payments on a bill, such as a request to transfer funds, conduct a foreign transaction or pay bills online.
  • Prepaid card fees. Agency officials said that for people who do not have bank accounts, prepaid cards provide “critical access” to financial services. But while someone may select a card based on the monthly fee structure, additional fees may be attached to using the card.
  • Closing costs and home-buying fees. Fees associated with closing on a home sale, including documentation preparation or title insurance can drastically cut into household equity, the agency said.

The result, the CFPB is that “people may find their monthly budget busted.

Financial services trade groups, including the Credit Union National Association and the National Association of Federally-Insured Credit Unions, already have denounced the CFPB effort as misguided and misleading.


  • David Baumann

    David Baumann established and edited the Washington Credit Union Daily website before it was put on hiatus while he served as the editor of the regulatory and legislative blog at CUCollaborate. Before starting Washington Credit Union Daily, David was the Washington correspondent for the Credit Union Times. A veteran Washington reporter, he has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

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