Comment Period on ‘Junk’ Fees RFI Expires, as State AGs Call for End to Convenience Fees

The comment period on the Consumer Financial Protection Bureau’s Request for Information related to what it calls “junk” fees closed yesterday, with more than 25,000 comments filed. Among the comments that were filed on the last day was one from 22 state attorneys general, calling on the CFPB to end convenience fees charged by mortgage servicing operations for taking payments via different channels.

While the CFPB has published data during the comment period regarding late fees assessed by credit card lenders, leading some to speculate that those might be the first target by the Bureau on its quest to improve consumer protections by removing excessive fees that are often not tied to a specific product or service, there are a number of different options for the CFPB moving forward. It can take the comments, analyze them, and issue some type of rule aimed at regulating the fees it things are excessive or unnecessary, or it can engage in enforcement actions against companies it deems to be the most egregious assessors of the fees in question.

The AGs argue that convenience fees are “particularly unfair and abusive,” because, in most cases, consumers do not get to choose who services their mortgages. Those words should send alarm bells ringing in the heads of everyone in the accounts receivable management industry, because consumers lack the ability to choose which collectors are hired to collect on their unpaid debts.

“That consumers should face additional charges depending on how they pay their bills, for instance by paying online, is absurd,” said Kwame Raoul, the Attorney General of Illinois, in a statement. “Convenience fees allow mortgage servicers to be paid twice, for simply performing their most basic function of accepting payments. Convenience fees are unfair and result in people paying more in the long run. I am urging the CFPB to prohibit mortgage servicers from being able to charge convenience fees that exploit residents when they are trying to pay their bills.”

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