Photo of Alejandro Moreno

Alejandro (“Alex”) Moreno is a partner in the Business Trial Practice Group in the Firm's San Diego office. He is the firm’s 2021 Leadership Council on Legal Diversity (LCLD) Fellow.

The Consumer Financial Protection Bureau (“CFPB”) has continued to ratchet up its regulatory scrutiny over the consumer financial services market.  On January 26, 2022, the CFPB published an initiative seeking public input on so-called “junk fees” in consumer financial services.  According to the CFPB, “junk fees” occur where: (i) fees are charged for things consumers believed were covered by the baseline price of a product or service; (ii) fees are unexpected; (iii) the expense of the fee is greatly disproportionate to the cost of the service; or (iv) it is unclear why a fee was charged.  The CFPB contends that “junk fees” are detrimental to the market for financial services because they “obscure the true price” of a service by, for example, offering attractive introductory pricing, but then make up the difference by levying various back-end fees on consumers.
Continue Reading Consumer Fees Find Themselves in the Crosshairs: The CFPB Seeks Public Input on Alleged “Junk Fees” in the Consumer Financial Services Industry

The Consumer Financial Protection Bureau (“CFPB”) has enhanced its regulatory scrutiny of the fees financial institutions assess on consumer depositors.  To better understand the gamut of such fees and financial institutions’ practices with respect to the same, the CFPB has required financial institutions to submit detailed quarterly statements identifying and breaking out the various types of fees assessed on consumer accounts.  In particular, the CFPB has required them to provide aggregate amounts charged as (i) overdraft and non-sufficient funds (“NSF”) fees; (ii) periodic account maintenance fees; and (iii) ATM fees (in particular, the fees charged in connection with consumer transactions at out-of-network ATMs).  The CFPB has now analyzed the consumer fee data going back to 2015 and published two reports: (i) Data Point: Overdraft/NSF Fee Reliance Since 2015—Evidence from Bank Call Reports; and (ii) Data Point: Checking Account Overdraft at Financial Institutions Served by Core Processors.  In general, the reports reveal that overdraft and NSF fees constitute one of the primary sources of financial institution revenues generated from consumer banking operations.  Indeed, overdraft fees alone generated more than $15 billion in revenues for banks and credit unions in 2019.

Continue Reading The CFPB Study Shines Spotlight on Banking Fees as a Presage to Greater Regulatory Scrutiny of Consumer Banking Fees