On January 24, 2024, the Consumer Financial Protection Bureau (CFPB) announced a new proposed rule as part of the CFPB’s broader strategy of targeting junk fees.  This proposed rule would “prohibit non-sufficient funds (NSF) fees on transactions that financial institutions decline in real time.” These fees apply to “transactions declined right at the swipe, tap, or click,” which include declined ATM withdrawals, declined debit card purchases, and declined peer-to-peer payments. Though not a particularly common fee, the CFPB explained that it “is taking proactive steps to ensure that financial institutions do not impose these fees, which can occur for a host of reasons that are out of the consumer’s control.” According to CFPB Director Rohit Chopra, “over the years, large banks and their consultants have concocted new junk fees for fake services that cost almost nothing to deliver. 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.” The proposed rule would declare the practice of charging such fees an abusive practice under the Consumer Financial Protection Act (CFPA). The CFPB is accepting public comments on the proposed rule until March 25, 2024.

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