CFPB issues guidance to stop big banks from charging “illegal junk fees”
The US Consumer Financial Protection Bureau (CFPB) has issued its first advisory opinion on a legal provision which forbids large banks from charging customers illegal junk fees for basic services.
CFPB issues guidance to stop large banks from charging illegal fees for basic services
As per a 2010 federal law, big banks and credit unions with more than $10 billion in assets are required to provide “complete and accurate” account information when requested by the accountholders.
The CFPB says it became aware of banks charging fees for these requests after “market monitoring and the public’s comments about large banks’ customer service”.
The regulator points out that as large banks “shift away” from a relationship banking model that values high customer service, it has issued the advisory opinion to make it clear that people are entitled to get the basic information they need without having to pay junk fees.
The guidance also details how the CFPB plans to implement legal requirements for banks when it comes to customer service, including how it will evaluate the fees that banks charge its customers for “reasonable” requests such as asking for original account agreements or account information on recurring withdrawals.
“While small relationship banks pride themselves on customer service, many large banks erect obstacle courses and impose junk fees to answer basic questions,” comments CFPB director Rohit Chopra.
“While the biggest banks have abandoned the relationship banking model, federal law still requires them to answer certain customer inquiries completely, accurately, and in a timely manner.”
The CFPB adds that it will not seek monetary relief for potential violations of the law before 1 February 2024, and asks customers and bank employees to report complaints and violations as it looks to push initiatives that “preserve relationship banking” in the US.
