Last Wednesday, we published three blog posts about new actions taken by the CFPB and FTC related to the Biden Administration’s war on “junk fees”:
Also last Wednesday, the White House held an event at which President Biden spoke about these new developments as well as developments at other federal agencies to curb “junk fees” charged by companies subject to the jurisdiction of such agencies. In addition, the White House issued a statement related to the Administration’s junk fee initiative that chronicles actions targeting junk fees taken earlier this year by the CFPB, FTC and other agencies such as the FCC and HUD whose actions often apply to consumer financial services providers. At least so far, none of these other agencies have taken any actions related to junk fees which affect consumer financial services providers.
However, the White House also directed all executive federal agencies to consider the impact on competition of any regulations they develop and issued related guidance. The White House considers charging junk fees to be an anticompetitive practice. Thus, it would not be surprising to see other agencies (e.g., OCC, FDIC, and FRB) issue regulations curbing junk fees.
While there was very little new information in President Biden’s remarks and the White House statement issued yesterday that is germane to consumer financial services providers, President Biden did mention that the CFPB will be issuing a notice of proposed rulemaking regarding Section 1033 of Dodd-Frank (the so-called “open banking” provision) before the end of October. The President also mentioned the CFPB’s proposed credit card late fee regulation which would reduce the safe harbor to $8. Unfortunately, the President still considers credit card late fees to be a type of junk fee.
We have been closely monitoring all activities of the White House, CFPB, and FTC related to junk fees since President Biden announced in his February 2023 State of the Union address that his Administration was “taking on junk fees.” Earlier this year, we held a webinar, “The CFPB’s Inquiry into “Junk Fees”: What It Means for Consumer Financial Services Providers,” which we later re-purposed into a two-part episode of our Consumer Finance Monitor Podcast. Part I is available here and Part II is available here.
As indicated above, on November 28, 2023, we will hold another webinar covering the most recent developments relating to junk fees. Click here to register.
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