CFPB Rule: No New Junk Fees for Banks

Regulator takes steps to prevent new junk fees on bank transactions

While the Consumer Financial Protection Bureau (CFPB) is taking steps to curtail existing junk fees such as those assessed by banks on overdrafts, the federal regulator has also proposed rules that would prevent banks from shifting to new junk fees.

In anticipation of possible new fees, the CFPB is proposing a rule that would prevent banks from assessing a fee for transactions that are declined at the point of sale.

“Over the years, large banks and their consultants have concocted new junk fees for fake services that cost almost nothing to deliver,” said CFPB Director Rohit Chopra. “Banks should be competing to provide better products at lower costs, not innovating to impose extra fees for no value. The CFPB will continue to rid the market of junk fees today and prevent new junk fees from emerging in the future.”

While banks typically only assess fees for transactions resulting in overdrafts, the CFPB notes that the industry has a tendency to devise new fees. The proposed rule would make it unlawful to charge a fee for a transaction declined in real time.

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