CUNA Mutual Group RISK Alert: CFPB Targeting Excessive Junk Fees

Credit unions should examine their fees for products and services to determine if any fees could be labeled as “junk fees.”

JMFA Thumbdownload 3CUNA Mutual Group warns that the Consumer Financial Protection Bureau (CFPB) recently issued a press release stating that they had launched an initiative  to save consumers billions of dollars a year by reducing "exploitative junk fees" charged by financial institutions.

In the press release, CFPB Director Rohit Chopra says“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees. By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”   

The CFPB had identified several areas where overdraft fees, non-sufficient fund fees, and other back end fees were deemed by them to be excessive. Areas they plan to research are:

• Deposit Accounts
• Credit Cards
• Remittance and Payments
• Prepaid Accounts
• Mortgages
• Other loan types 

The Risk Alert recommends that credit unions review their fees for products and services to determine if any could be deemed "junk fees" They also advise being ready to adjust fee structures should the CFPB use it rulemaking authority to limit fees that are charged by credit unions.

You can read the full Risk Alert here.

You can read the full CFPB Press Release here.