CFPB Issues Request For Information Regarding Junk Fees

On January 26, 2022, the Consumer Financial Protection Bureau (CFPB) issued a  Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products or Services (RFI).  In the RFI, the CFPB seeks public feedback regarding fees that are not subject to competitive pricing in order to assist the CFPB in exercising its authority to create fairer, more transparent, and competitive consumer financial markets.

In the RFI, the CFPB states that it has grown "increasingly concerned that consumer finance has become part of [the] 'fee economy,'" where "exploitative junk fees" charged by banks and other financial institutions far exceed the marginal cost of the service they purport to cover.  Companies may use hidden back-end fees, which are mandatory or quasi-mandatory fees added to a transaction after a consumer has chosen the product or service based on a "front-end" price, to lure consumers into making purchasing decisions based on a "lower" price.