The Consumer Financial Protection Bureau yesterday released a special version of its Supervisory Highlights report, breaking down all of the “unlawful junk fees” it found in deposit account products and loan servicing products, such as auto loans, mortgages, student loans, and payday lending. The fees included excessive late fees and pay-to-pay payment fees and kickbacks related “to certain types of payments “the most common payment methods.” At the same time, the White House hosted a virtual meeting yesterday with hundreds of state legislators discussing enforcement and legislation against junk fees. As part of that meeting, the White House released a guide to help states crack down on junk fees to help lower costs for consumers.
A copy of the Supervisory Highlights report can be accessed by clicking here. A copy of the White House’s guide can be accessed by clicking here.
The report — the 29th issue of Supervisory Highlights — uses incidents and examples found during supervisory examinations of different financial services companies between July 1, 2022 and February 1, 2023.
Among the issues cited in the report are:
- Unfair authorize positive, settle negative overdraft fees
- Assessing multiple NSF fees for the same transaction
- Overcharging late fees on auto loan payments and mortgages
- Charging unauthorized late fees after repossession and acceleration
- Charging estimated repossession fees significantly higher than average repossession costs
- Unfair and abusive payment fees
- Repeatedly charging consumers for unnecessary property inspections
- Misrepresenting that consumers owed PMI premiums
- Charging consumers fees that should have been waived
- Charging consumers for PMI after it should have been removed
- Charging late fees after sending periodic statements listing a $0 late fee
- Splitting and re-presenting consumer payments without authorization
- Charging borrowers repossession-related fees not authorized in automobile title loan contracts
- Failure to timely stop repossessions, charging fees and refinancing despite prior payment arrangements
- Charging late fees and interest after reversing payments
During the meeting with state legislators, Rohit Chopra, the director of the CFPB, offered a reminder that most states have rules against unfair and deceptive acts or practices, of which junk fees might be considered to be prohibited.
See all of AccountsRecovery.net’s coverage of the crackdown on junk fees by clicking here.
