FOR IMMEDIATE RELEASE

Oct. 11, 2023

CONTACT:
William Pierre-Louis, Jr.
william@ourfinancialsecurity.org

New Protections from Junk Fees Will Save Consumers Billions
Hidden fees, overdraft fees, and late fees all subject of White House event

WASHINGTON, D.C. – The Federal Trade Commission and Consumer Financial Protection Bureau’s announcement of new actions to crack down on junk fees is a critical initiative in stopping companies from ripping off consumers with hidden and misleading fees and compelling firms to provide upfront and accurate pricing on products and services.

“Junk fees often unexpectedly affect the financial lives of American consumers in ways not known until after the fact,” said Elyse Hicks, consumer policy counsel at Americans for Financial Reform. “Hidden fees are not only cloaked in deception, they amplify existing inequities of wealth and access.”

Today’s announcement, highlighted at a White House event, included the CFPB’s new requirements on big banks to offer essential information – notably account balances – free of charge. Both measures will empower consumers and foster competition. The CFPB released data showing most banks had eliminated non-sufficient funds fees, saving families $2 billion each year and that supervisory actions had led to $140 million in refunds of fees for consumers. The announcement also highlighted the FTC’s plans to stop fees from being hidden by requiring upfront disclosures of charges that raise the final prices of goods and services.

“The policies announced today will lead to greater transparency, which will shield consumers from harmful business practices by the financial services industry while forcing banks to compete on quality of service,” Hicks added.

Earlier this year, the CFPB took significant actions to curb credit card late fees. The agency proposed a rule to lower the maximum late fee to $8, end annual inflation adjustments, and cap late fees at 25% of the minimum payment. These efforts could save consumers up to $9 billion.

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