CFPB Issues Supervisory Highlights on Junk Fees

Recently, the CFPB issued Supervisory Highlights on Junk Fees, that detailed certain types of what the CFPB characterizes as “unlawful junk fees” that have been charged in relation to deposit accounts and the servicing of mortgage, auto, student, and payday loans.  Therein, the CFPB describes junk fees as “exploitative fees charged by banks and financial institutions.” 

The supervisory highlights goes on to discuss fees that have been scrutinized in relation to deposit accounts, including: (1) overdraft fees on debit card or ATM transactions where the consumer had a sufficient available balance at the time of authorization, but due to the delay in settlement had an insufficient balance at the time of settlement; and (2) charging multiple non-sufficient funds fees for the same transaction. 

Regarding mortgage servicing, the supervisory highlights provide that examiners identified a number of violations in relation to junk fees including: (1) overcharging late fees; (2) repeatedly charging consumers for unnecessary property inspections; (3) misrepresenting that consumers owe PMI premiums; (4) charging consumers fees that should have been waived; (5) charging PMI after it should have been removed; and (6) charging late fees after sending periodic statements listing a $0 late fee.

See our most recent prior coverage on “junk fees” here.