- The US Consumer Financial Protection Bureau (CFPB) proposes a ban on fees for non-sufficient funds (NSF) charged by banks, credit unions, and certain P2P payment companies.
- The ban specifically targets NSF fees for transactions declined in real-time, such as those at the point of sale.
- NSF fees are typically incurred when a transaction is processed and then declined due to insufficient funds, with an average value of $34 according to CFPB data from 2022.
- The CFPB considers NSF fees applied to transactions involving debit cards and ATMs as “unlawful” under the Consumer Financial Protection Act.
- The proposed rule aims to end what the CFPB calls “junk fees” created by large banks, emphasizing the need for competition to provide better products at lower costs.
- The CFPB had previously signaled its stance against such fees in October and issued guidelines forbidding large banks from charging customers illegal fees for basic services.
- Recently, the CFPB proposed legislation against overdraft fees, seeking to bring large financial institutions further under consumer protection laws by mandating the disclosure of the true cost of overdraft interest rates.
