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ARTICLE · 26 JANUARY 2024

CFPB Continues Its War On Fees

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The CFPB recently proposed two rules on its continuing war on so-called junk fees.

United StatesFinance and Banking
Moorari K. Shah
Moorari K. Shah
A.J. Dhaliwal
A.J. Dhaliwal
Mehul Madia
Mehul Madia
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The CFPB recently proposed two rules on its continuing war on so-called junk fees.

The first rule, proposed on January 17, target's bank overdraft programs. Currently, financial institutions that extend overdraft loans are exempt from certain disclosure and underwriting requirements under TILA. This exemption was intended to allow banks to provide limited overdraft services as a courtesy to customers who inadvertently overdrew on their accounts. The Bureau now claims that fees generated from these overdraft credit products are excessive and harmful to consumers.

  • Lower Overdraft Fees. Under the proposed rule, financial institutions with over $10 billion in assets would have to comply with TILA's disclosure requirements for overdraft products unless the products were provided at or below costs. The Bureau is considering defining "at cost" fees at $3, $6, $7, or $14, significantly lower than the $35 fee that many financial institutions

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