The federal regulatory agency continuously targets excessive fees known as “junk fees” in consumer financing, and its focus has shifted to the fees imposed on debtors when they pay amounts owed via phone or online.
Fees Imposed on Debtors
In the opinion of the Consumer Financial Protection Bureau (CFPB), if the original loan agreement or law does not explicitly mention the fees, they are considered a violation of the federal Fair Debt Collection Practices Act. The bureau has clarified that some debt collectors impose additional fees on payments made online or over the phone, even when these methods are cheaper and less time-consuming for them to process these payments.
Campaign Against Junk Fees
The federal regulatory agency is currently running a campaign against what it calls “junk fees” that exploit consumers. It conducted a review last month to determine whether the $12 billion credit card late fees are reasonable and proportionate, for example. In January, it requested information from the public regarding fees charged by banks and financial companies that the public believes are unfair or excessive.
Response from the U.S. Chamber of Commerce
The agency’s campaign against these fees is one reason why the U.S. Chamber of Commerce, the largest business organization in the country, launched an advertising campaign last week against what it described as “Director Rohit Chopra’s ideologically driven agenda.” The chamber stated that the CFPB director seeks to “fundamentally change the nature of the financial services industry in America,” and if his efforts succeed, Chopra’s actions will negatively impact innovation and consumer choice regarding credit cards, loans, and other financial services.
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Sources:
- CFPB. “CFPB Moves to Reduce Junk Fees Charged by Debt Collectors.”
- U.S. Chamber of Commerce. “US Chamber of Commerce Launches Campaign to Rein In Out-of-Control CFPB Director Rohit Chopra.”
Source: https://www.thebalancemoney.com/federal-watchdog-targeting-some-debt-collection-fees-5525202
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