Harris win may boost US effort to rein in 'junk fees' levied on consumers

FE Team | Published: October 10, 2024 23:50:35

Vice President Kamala Harris

WASHINGTON, Oct 10 (Reuters): A crackdown by the US consumer finance watchdog on hidden or excessive financial fees could expand to target billions of dollars in mortgage, credit reporting and other fees if Vice President Kamala Harris wins the presidential election.
Expunging "junk fees" has been a central, and popular, plank of Democratic President Joe Biden's push to bring down prices. And with inflation and the economy at the heart of the presidential race, Democratic candidate Harris has pledged to carry on the fight.
Rohit Chopra, director of the US Consumer Financial Protection Bureau under Biden, has targeted around $20 billion of annual bank overdraft, credit card and bounced-check fees, according to the agency's data. But there are billions of dollars of other fees the agency could go after with four more years of Democratic leadership. Chopra's term ends in 2026.
According to a CFPB official and a second regulatory source, the CFPB's next top targets include mortgage closing costs and business-to-business fees that trickle down to customers, in particular borrower credit-score fees.
While there is no publicly available data on the total annual value of these fees, a Reuters analysis of CFPB and other data suggests they could exceed $24 billion.
"Harris would be wise to continue to focus on junk fees ... as vice president she's observed the success first-hand," said Aaron Klein, senior fellow at the Brookings Institution think tank. The CFPB says the financial system is riddled with fees that are not disclosed up front or which are excessive and distort the free-market system by concealing the true price of goods and services.
Banks say the fees are transparent and that eliminating them will hinder Americans' access to credit.