Advocates praise effort to take on hidden fees that threaten access to affordable housing and basic bank and credit union account information
WASHINGTON – Today, the Biden-Harris administration announced new efforts to crack down on junk fees, including a Federal Trade Commission (FTC) proposal on junk fees imposed by many businesses, including landlords, and a Consumer Financial Protection Bureau (CFPB) guidance prohibiting bank fees for consumers to obtain basic information about their own accounts.
The FTC proposal would require disclosure of hidden junk fees, including those imposed on renters – building on an announcement from the White House in July. The proposal extensively referenced a National Consumer Law Center survey of legal services and nonprofit attorneys that identified the many, unavoidable junk fees that tenants face.
“We applaud the FTC for its proposed rule addressing hidden and misleading fees and for specifically focusing on junk fees in the rental housing context,” said Ariel Nelson, staff attorney at the National Consumer Law Center. “We have seen unfair and exorbitant rental junk fees across the rental market, and we appreciate the FTC for taking a first step to curb this predatory practice. By requiring an ‘all-in’ price tag, the FTC will prevent surprise fees that disguise the true cost of housing. We urge the FTC to ultimately enact a rule that also prohibits the imposition of certain junk fees that put safe and decent housing even more out of reach for millions of low-income renters.”
NCLC’s recent report Too Damn High: How Junk Fees Add to Skyrocketing Rents analyzed the pervasive nature of junk fees in the rental housing market and made policy recommendations to minimize the harm to renters. The report found that in addition to sky-high rent prices, a number of junk fees, including pet fees, deposits, pest control fees, valet trash fees, and even a “January fee,” are contributing to the affordable housing crisis. Junk fees add to the already heavy burden that exorbitant rents place on renters, with over 40% of renter households—19 million households—in the United States being “cost burdened,” i.e., paying over 30% of their income on housing costs.
The CFPB guidance comes in the form of an advisory opinion stating that large banks and credit unions cannot impose unreasonable junk fees on consumers seeking basic information about their own accounts. The CFPB noted that a specific provision of the Dodd-Frank Act requires these financial institutions to provide account information when it is requested by customers.
“The CFPB guidance will prevent those $5 ‘statement copy fees’ and similar charges that banks charge consumers to get back statements or other account information,” said Chi Chi Wu, senior attorney at NCLC. “This will save consumers some of their hard-earned money, something the CFPB has excelled at these past two years.” The CFPB guidance also makes clear that banks must respond promptly to consumer requests for information such as a loan payoff balance or copy of their account agreement.
Annually, consumers pay tens or even hundreds of billions of dollars in junk fees on bank accounts, credit cards, rental agreements, and other goods and services. Junk fees are even tacked onto debts by debt collectors and imposed on incarcerated people and their families trying to pay for necessities. Learn more about NCLC’s work to fight junk fees.
- Fighting Junk Fees, Mar. 15, 2023
- Group Comments to the FTC Regarding Rental Housing Junk Fees, Feb. 8, 2023
- Biden Administration, FTC Must Crack Down on “Junk Fees” in Criminal Justice System, Feb. 8, 2023
- Consumer Advocates Urge CFPB to Protect Consumers From “Junk Fees,” May 2, 2022
- Comments to CFPB on Junk Fees Charged to Tenants & Rental Housing Applicants, Apr. 11, 2022