#junk fees – Page 4 – Federal Financial Analytics

1 02, 2023

DAILY020123

Eliza Allen2023-02-01T16:53:57-05:00February 1st, 2023|2- Daily Briefing|

CFPB Set To Quash Credit-Card Late Fees

Taking action as anticipated following its June ANPR (see FSM Report CREDITCARD35), the CFPB today released an NPR that would curtail credit card late fees the Bureau calls “excessive,” moving ahead also with one aspect of the White House competition agenda.

Comment Deadline Set For CFPB Contract Registry Proposal

The Federal Register today includes the CFPB’s form-contract registry proposal. As noted (see FSM Report CONSUMER48), the Bureau’s NPR would establish a public registry requiring nonbanks to post contract provisions which the agency believes threaten consumer legal or free-speech rights.

Brown, Democrats Press Thompson On Enterprise Loan Sale Programs

Ahead of a housing hearing as soon as next week, Senate Banking Chairman Brown (D-OH) and four other Democrats today sent a letter to FHFA Director Thompson requesting a review of Fannie and Freddie’s nonperforming and reperforming loan-sales programs.

McHenry Confirms Privacy, Crypto Priorities; Rewrites HFSC Rules

At an HFSC organizational meeting, Chairman McHenry (R-NC) today emphasized that he wants to work with Democrats, but much of what he said is unlikely to facilitate this. For example, he noted with regard to crypto legislation that he wants to end the SEC’s enforcement-focused policy; as previously noted, any crypto legislation curtailing the SEC will run afoul of Democratic views in both the House and Senate.

Daily020123.pdf…

31 10, 2022

Karen Petrou: The Moral Dilemma of CFPB Dictate

Arezou Rafikian2022-11-01T16:56:49-04:00October 31st, 2022|The Vault|

There is little question that electoral politics powered the President’s launch last week of a new Administration “junk-fee” campaign. How most of these fees matter to the majority of households fuming as they can’t handle prices at the food store and fuel pump is yet to be seen, but politics is only part of the reason for the CFPB’s high-priority blitz against “surprise” fees. Politics is easily understood, if not practiced to maximum advantage. Regulatory actions founded on moral philosophy are not only a compliance conundrum, but also an intellectual quandary.

Question for today’s class: is it right for Rohit Chopra to set rules regardless of the niceties of the rulemaking process when he believes certain acts or practices violate the natural rights of the U.S. citizenry? This may seem a hyperbolic description of the CFPB’s spate of enforceable pronouncements, but it’s the way I read many of them.

Take for example the latest edict on overdraft fees. As FedFin’s in-depth analysis will detail later today, the CFPB’s circular details a raft of laws and rules governing overdraft fees, going on to say how nice they all were but how little they matter anymore.

Because technological delivery can, the CFPB says, obscure fund availability, the Bureau concludes that fees which comply with every provision of each applicable law and rule are still unfair, deceptive, and/or abusive. Disclosures that comply with every provision in each law and rule also no longer suffice, the Bureau believes, and thus depository institutions have an …

31 10, 2022

OVERDRAFT11

Eliza Allen2022-10-31T11:38:50-04:00October 31st, 2022|1- Financial Services Management|

“Surprise” Fee Restrictions

In conjunction with a Presidential speech and new White House initiative against “junk fees,” the CFPB has accelerated its own efforts in this arena with two new policy directives. As with many other recent Bureau actions, the new circular and bulletin do not take the form of notice-and-comment rulemakings, but rather are directives with express enforcement implications unless or until the courts overturn them, the General Accounting Office intervenes to bar guidance outside the rulemaking process as it did years ago related to inter-agency leveraged-loan standards, or new law reconfigures the agency. The most immediate implication of these edicts is a ban on blanket rejected deposit fees and further constraints on overdraft fees. However, the reasoning and rationale in these orders is likely to carry over to a pending agency rulemaking on credit-card fees and possible initiatives related to remittances and even debit- or credit-card interchange fees.

OVERDRAFT11.pdf…

31 10, 2022

M103122

Eliza Allen2022-10-31T09:58:16-04:00October 31st, 2022|6- Client Memo|

The Moral Dilemma of CFPB Dictate

There is little question that electoral politics powered the President’s launch last week of a new Administration “junk-fee” campaign. How most of these fees matter to the majority of households fuming as they can’t handle prices at the food store and fuel pump is yet to be seen, but politics is only part of the reason for the CFPB’s high-priority blitz against “surprise” fees. Politics is easily understood, if not practiced to maximum advantage. Regulatory actions founded on moral philosophy are not only a compliance conundrum, but also an intellectual quandary.

m103122.pdf…

26 10, 2022

DAILY102622

Eliza Allen2022-10-26T17:02:07-04:00October 26th, 2022|2- Daily Briefing|

BIS Announces Successful Multi-CBDC Platform Pilot

Following their retail crypto pilot last week, the BIS announced a successful pilot blockchain ledger – dubbed the mBridge Ledger – connecting twenty commercial banks in China, Hong Kong, Thailand, and the UAE via a multi-CBDC common platform. Both domestic and foreign commercial banks are permitted to directly hold and transact in CBDCs on the platform to ensure seamless cross-border payments. To protect monetary sovereignty, the platform allows governments to flexibly control CBDC issuance and redemption, transaction currencies and amounts, and visibility into usage.

With President at His Side, Chopra Sanctions Overdraft, Deposit Fees

President Biden today took aim at junk fees, slamming them in general even as he praised the CFPB’s initiative today sharply to limit “surprise” overdraft and deposit fees. The agency did so by issuing a circular on unanticipated overdraft fee assessment practices and a bulletin on Returned Deposited Item Fee Assessment Practices, again using its non-regulatory tools to enact new policy and set stringent enforcement standards. We will shortly provide clients with in-depth analyses of each release.

Daily102622.pdf…

19 10, 2022

DAILY101922

Eliza Allen2022-10-20T17:16:10-04:00October 19th, 2022|2- Daily Briefing|

CFPB Brings Older Adults Into Fair-Fee Focus

Following yesterday’s enforcement action and furthering its “fair-fee” policy agenda (see FSM Report CONSUMER38), the CFPB today published an Issue Brief on overdraft fees and economically-insecure older adults.

HUD Advances LIBOR Replacement As Deadline

Following its ANPR on replacing LIBOR last year, HUD today published a proposed rule to remove LIBOR as an approved index for forward ARMs and reverse mortgages, replacing it with SOFR. For existing ARMs, HUD proposes to establish a spread-adjusted SOFR index to transition from LIBOR, with a lifetime five percent interest-rate cap for monthly adjustable rate reverse mortgages.

House Republicans Question PayPal’s Content Fine Mistake

Following revelations that PayPal had temporarily imposed a penalty fee on certain content, HFSC Ranking Member McHenry (R-NC), Energy and Commerce Ranking Member Rodgers (R-WA), and Reps. Emmer (R-MN) and Griffith (R-VA) sent a letter to PayPal CEO Dan Schulman requesting more information about PayPal mistakenly updating its Acceptable Use Policy to include a fine for sharing “objectionable” messages on the platform.

Fed Study Finds Little Evidence of Discrimination in Mortgage Lending

A new Fed study on racial bias in mortgage lending finds little evidence of discrimination, concluding instead that disparities in observable applicant risk explain most racial denial disparities. The study uses confidential HMDA supervisory data from 2018-2019 that controls for credit scores, DTI, and LTV on top of automated underwriting systems (AUS) recommendations.

Daily101922.pdf…

18 10, 2022

DAILY101822

Eliza Allen2022-10-18T17:16:23-04:00October 18th, 2022|2- Daily Briefing|

CFPB Uses Enforcement Action to Press Payment-System Digital, Fee, Safety, Fairness Standards

Using an enforcement action today against ACTIVE Network, CFPB Director Chopra emphasized that this case epitomized broader Bureau concerns. These are monitoring use of “digital dark patterns” – i.e., design features that manipulate users into harmful behavior that are profitable for companies.

Treasury’s FIO Seeks Input On Climate-Related Data Collection

Taking further action in response to the President’s Executive Order on Climate-Related Financial Risk (see FSM Report GREEN8), Treasury’s Federal Insurance Office today requested comment on a proposed data collection regarding current and historical underwriting data on homeowners’ insurance from property and casualty insurers to assess climate-related financial risk.

HFSC Republicans Push Yellen to Support IFI Nuclear Energy Funding

In light of recent energy shortages in Europe, Ranking Member McHenry (R-NC) and Rep. Hill (R-AR) sent a letter today to Treasury Secretary Yellen urging her to support the European Bank for Reconstruction and Development and other IFIs financing nuclear energy projects. They claim that an absence of Western funding has allowed China and Russia to fill the void, especially in developing countries.

Daily101822.pdf…

29 07, 2022

DAILY072922

Eliza Allen2023-01-04T13:45:23-05:00July 29th, 2022|2- Daily Briefing|

Credit-Card Routing Expansion Introduced, Faces Long Odds

As anticipated, Sens. Marshall (R-KS) and Durbin (D-IL) have introduced S. 4674, legislation to extend routing-system requirements to credit cards.

FDIC, Fed Crack Down on IDIs Working with Crypto Companies

In addition to joining the Fed in sending a stern warning to Voyager about misrepresenting FDIC insurance, the FDIC today issued an advisory instructing IDIs as to how best to partner with crypto companies to prevent future misunderstanding and ensure compliance with the agency’s new rule (see FSM Report DEPOSITINSURANCE113).

BIS Lays Out Risks to Central Bank Green Assets

The BIS Consultative Group on Risk Management today released a report detailing the data and methodological challenges faced by central banks implementing climate risk into their reserve-management frameworks.

FTC Takes on Payment Processing

The FTC today unanimously reached a settlement with the nation’s largest payment processor, First American, related to what some call “trick-and-trap” practices.

BIS Advances Cross-Border PVP Payment Options

Hoping to speed the introduction of payment versus payment (PvP) systems to reduce frictions in cross-border payments, the BIS today released a call for information that details previous PvP proposals and asks for comment on them.

HFSC Republicans Expand CFPB Attack to State-AG Partnerships

Continuing their campaign against CFPB Director Chopra, HFSC Republicans have sent him a letter accusing the Bureau of intimidating companies by pursuing duplicative enforcement actions with state regulators.

Daily072922.pdf…

5 07, 2022

CREDITCARD35

Eliza Allen2023-01-24T15:45:32-05:00July 5th, 2022|1- Financial Services Management|

Credit-Card Late Fees

Taking the first concrete action following its new policy on “junk fees,” the CFPB has sought public comment on whether and how to govern credit-card late fees and broader practices related to late payments. The ANPR’s focus is directly on inflation adjustments permitted for these fees under current rules, but it notes broader interest in other fees, extending questions to the entire construct of credit-card pricing, profit, services, and fees. The proposal itself indicates no policy direction, but Director Chopra made it clear when this was issued that he believes current late fees are far too high. To the extent this rulemaking reverses current standards, consumers would benefit, but some might become more willing to let bills go unpaid and risks and costs might rise, leading card offerings to become less attractive.

CREDITCARD35.pdf…

22 04, 2022

Al042522

Arezou Rafikian2023-03-01T16:02:32-05:00April 22nd, 2022|3- This Week|

Recidivist Witness Tackles Repeat Offenders

Later this week, CFPB Director Chopra will appear at what are sure to be acrimonious sessions before the House Financial Services and Senate Banking Committees. Laying some pipe ahead of time, Mr. Chopra joined New York’s AG in taking action against another firm he characterized as a “repeat offender,” tracking rhetoric in a prior “repeat-offender” suit but not – at least so far – trying to drive these firms out of business. We expect this repeat-offender initiative to be one focus of Mr. Chopra’s testimony and perhaps also a topic on which Chairwoman Waters (D-CA) will engage to highlight her longstanding effort to punish non-compliant “megabanks” (see FSM Report GSIB11). These hearings will, though, witness far more than a few more notches on Mr. Chopra’s belt. The hearing thus will focus on hot-button issues such as student lending, medical debt, and the employer practices highlighted in Member posts late last week.

Al042522.pdf…