The new consumer control guidelines aim to put an end to “junk fees” in banks

Rohit Chopra, director of the Consumer Financial Protection Bureau, testifies during a hearing of the Senate Committee on Banking, Housing and Urban Affairs on April 26, 2022.

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The country’s consumer scrutiny is stepping up its efforts to crack down on so-called junk fees that some banks charge consumers.

The Consumer Financial Protection Bureau said Wednesday that it has issued guidelines to end two particular bank charges that may surprise customers and are “likely unfair and illegal,” according to the agency’s statement. This decision is the latest in the CFPB’s ongoing initiative to review unwanted charges, which are generally unexpected or excessive charges.

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“Americans are willing to pay for legitimate services at a competitive price, but are frustrated when hit with unwanted fees for unexpected or unwanted services that are of no value to them,” said the CFPB director. , Rohit Chopra.

In a Wednesday morning press conference, President Joe Biden said the administration’s actions on unwanted fees, including those of banks, hotels, airlines and other entities, “will immediately start saving money.” and would hold companies accountable.

“My administration also makes it clear that surprise overdraft allegations are illegal,” he said.

The American Bankers Association did not immediately respond to a CNBC request for comment.

CFPB targets surprise overdrafts and depositor fees

The new guidelines first point to surprise overdraft fees, which can go as high as $ 36 each, the CFPB said. These charges can arise when a customer had enough money in their account to cover a charge at the time of the bank’s authorization, but then an overdraft charge is charged due to the timing of the charge. Other charges affect his account.

The second charge for CFPB addresses can occur when a customer deposits a check that eventually bounces, although the overdraft is due to the check writer’s insufficient funds. The fee is typically $ 10 to $ 19 per instance, according to the CFPB.

Already this year, many banks eliminated overdraft fees and insufficient funds or made their policies more consumer friendly. The CFPB estimates that these changes translate into savings of $ 3 billion for consumers.

– CNBC reporter Emma Kinery contributed to this story.

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