President Joe Biden today announced a renewed push to eliminate what his administration has branded “junk fees” across several business sectors, including fees charged by larger banks for certain customer services. Among the proposals was new CFPB guidance stating that banks and credit unions with more than $10 billion in assets cannot charge customers fees for “basic information,” such as customer inquiries into account balances or the amount necessary to pay off a loan balance. The bureau alleges that Section 1034(c) of the Dodd-Frank Act effectively bans the fees as it requires financial institutions to comply with consumer requests for information in a timely manner.
The American Bankers Association pushed back on this claim in press reports. “The administration’s latest attempt to suggest that highly regulated bank fees already disclosed under federal law are ‘junk’—or even illegal—continues to mislead the American people,” an ABA spokesperson said. “Consumers are smarter than that, which is why 94% of those surveyed in a national Morning Consult poll released on Monday rated their primary bank’s customer service as ‘excellent, very good or good,’ and eight out of 10 respondents say their bank is transparent about fees.”
ABA also questioned the bureau’s regulatory process for “making clear that these fees are now illegal,” as President Biden said in his remarks, even though Section 1034(c) makes no reference to fees. “Instead of proposing changes and giving consumers and other stakeholders a chance to provide input, Director [Rohit] Chopra’s CFPB once again is claiming authority Congress never gave the bureau via guidance and press release,” ABA added. “The nation’s consumers, as well as regulated businesses, deserve better.”
