The CFPB’s top 10 actions to protect consumers in 2024 (so far)

The CFPB proposed its Overdraft Lending Rule, which would subject overdraft fees to Truth in Lending Act disclosures and protections required for consumer credit, if they exceed the cost to banks.

Financial institutions rake in billions of dollars a year from overly punitive overdraft fees, which mostly penalize customers with the least money to lose. Many banks commonly charge about $35 per overdraft, sometimes three to five times in a single day. 

Numerous banks have changed their overdraft practices under the CFPB’s closer watch. Despite those changes and significant reductions in overdraft and non-sufficient funds (NSF) revenue, consumers still paid about $9 billion in overdraft fees in 2022 and more than $2.3 billion to just 10 large banks in 2023.

We signed a letter with 141 other organizations and also submitted our own comment letter and signatures we gathered from 5,576 consumers, in support of finalizing the much needed protections as soon as possible.

The CFPB proposed a rule that would prohibit non-sufficient funds (NSF) fees on debit transactions that have been declined in real time. As the CFPB pointed out, “Financial institutions almost never charge fees for transactions that are declined in real time at the swipe, tap, or click.”

The proposed NSF fee rule is an example of the CFPB taking proactive steps to protect consumers. 

As noted in a coalition letter we signed onto, without the rule, there is nothing stopping banks from deciding to charge these fees in the future.

The CFPB issued guidance about what can constitute a legal violation when the operators of online comparison-shopping tools receive kickbacks for the results they provide to consumers. This year’s guidance is part of the CFPB’s ongoing work to curb consumer manipulation in the comparison-shopping space, including similar guidance it provided last year for mortgage shopping tools and an effort it began to develop a credit card shopping tool.

The CFPB finalized a rule that will close a loophole that costs Americans $14 billion per year in late fees on their credit cards. 

The CFPB says 45 million Americans get charged one or more credit card late fees a year. The average penalty is currently about $32. However, the new rule sets a maximum of $8 and ends automatic inflation adjustments for that amount for issuers with 1 million or more open accounts.

As U.S. PIRG’s Ed Mierzwinski explained in a CNN op-ed, The CARD Act, passed by Congress and signed into law in 2009, “requires that such fees be ‘reasonable and proportional’ to the costs of handling late payments. It’s fair for banks to cover their costs when late fees cause them extra work. However, the CFPB found that many issuers hiked their late fees in lockstep each year without evidence of increased costs.” 

More than 130 advocates, including myself, defended the rule during Consumer Advocacy Week against efforts in Congress to overturn the rule. We are continuing to defend it and make sure it gets implemented.

The CFPB allows consumers to submit complaints to report problems with financial products or services. Companies have two weeks to respond to complaints before they are published in the CFPB’s public Consumer Complaint Database.

The CFPB released in March its annual report about complaints it received. The report showed continued record numbers of complaints, with 1,657,600 received in 2023. (It published 1,292,147 of those complaints after confirming a commercial relationship between the consumer and the company they complained about.) The CFPB is on track to process another record number of complaints this year, having already published more than 1.1 million complaints since January, compared to 650,443 published during the same period last year. In total, the CFPB has published more than 5.6 million complaints since December 2011.

The top gripe continues to be about credit reporting, which accounts for a whopping 81% of all complaints sent to companies in 2023. Relatedly, the CFPB has continued to ensure that credit bureaus comply with their obligations to correct credit reporting mistakes. (U.S. PIRG Education Fund’s 26 reports about the CFPB”s complaint database can be found here.)

When the CFPB takes legal action against a company for breaking the law, it might require payment into a victims relief fund, called the Civil Penalty Fund. The fund, in turn, is used to compensate consumers when other defendants file for bankruptcy or are otherwise not able to compensate victims they have harmed. 

The CFPB surpassed more than $1 billion in total payments from the fund when it distributed in May more than $384 million to about 191,000 consumers after Think Finance, a Texas-based online lender, “deceived borrowers into repaying loans they did not owe,” the CFPB said.

Since 2010, the CFPB’s Civil Penalty Fund has collected $3.5 billion into the fund and distributed $1.2 billion to 1.9 million people.

The CFPB issued an interpretive rule classifying ‘Buy Now, Pay Later’ (BNPL) lenders as credit card providers that must follow some rules that apply to credit cards. This will give consumers legal protections including the right to dispute charges, easily get a refund directly from the lender for a returned item, and get billing statements. 

A CFPB report released in 2022 found that more than 13% of BNPL transactions involved a disputed charge or a return. In 2021, consumers disputed or returned $1.8 billion in transactions at five large BNPL firms, the CFPB said. 

Problems with BNPL go much deeper than just returns, disputes and billing statements. U.S. PIRG Education Fund’s 2022 report, the Hidden Costs of Buy Now, Pay Later, based on a review of complaints to the CFPB and the Better Business Bureau, showed that hidden fees, interest, debt collection problems and poor customer service can harm consumers. While the rule is a welcome first step, we and our coalition partners will submit further comments in support of strengthening it by the CFPB’s August 1 deadline.

Following the release of its April report showing a steep increase in closing costs, the CFPB issued a Request for Information from the public about the mortgage closing costs borrowers are facing in the marketplace. 

In particular, the CFPB is seeking information about which fees are subject to competition, how fees are set and who profits from them, and how fees are changing and how they affect consumers. Comments are due on August 2.

The CFPB finalized a rule to establish a registry of non-bank financial firms that break local, state or federal consumer laws. This registry will help law enforcement across jurisdictions identify repeat offenders and “will also assist investors, creditors, business partners, and members of the public that are conducting due diligence or research on financial firms bound by law enforcement orders.”

The CFPB proposed a rule that would eliminate most medical debt from credit reports used for credit eligibility determinations. This step is in response to U.S. PIRG and other advocates calling on the agency to protect patients from the negative impact that medical debt has on consumer credit scores. Unlike other debt — such as debt from purchasing a consumer product — medical debt is often unavoidable and isn’t a reflection of poor spending habits. 

This proposed rulemaking follows a voluntary 2022 announcement by the three major credit bureaus – Equifax, Experian and TransUnion – that they would erase paid medical debt from credit reports and exclude medical debt of less than $500, after the CFPB released a report on the widespread problem of medical debt for American families. 

As the CFPB’s most recent research found, “Despite these voluntary industry changes, 15 million Americans still have $49 billion in outstanding medical bills in collections appearing in the credit reporting system.” We will join coalition partners in submitting public comments by the August 12 deadline.

The CFPB proposed an interpretive rule to replace an advisory opinion released under former CFPB Director Kathy Kraninger regarding the emerging market for paycheck advance products. The rule would clarify that paycheck advance products, sometimes marketed as “earned wage access,” and their associated expedited delivery fees and requested payments labeled as “tips” for using the product (rather than as costs connected to the extension of credit), are subject to Truth in Lending Act requirements, including disclosures of finance charges. U.S. PIRG and 95 other organizations previously called on the CFPB to rescind the advisory opinion and treat earned wage access products as credit.

The proposed rule was also accompanied by a new CFPB report, which showed that “The APR for a typical employer-partnered earned wage cash advance is 109.5%.”