Nearly $30 Billion in Punitive Fees

How banks and credit card companies bilk consumers instead of offering better service

Andy Spears


Photo by Jason Dent on Unsplash

Today, the Consumer Financial Protection Bureau (CFPB) issued a request for information on late and junk fees charged by banks and credit cards. The move is an effort to begin the process of designing protections for consumers in the credit and banking industries.

In making the announcement, the CFPB indicated that industry reform could save consumers billions of dollars each year.

“Many financial institutions obscure the true price of their services by luring customers with enticing offers and then charging excessive junk fees,” said CFPB Director Rohit Chopra. “By promoting competition and ridding the market of illegal practices, we hope to save Americans billions.”

Fee Economy

The CFPB derided what it labels a “fee economy” that has banks and credit card companies earning billions in profits from punitive fees rather than competing on better service.

Companies across the U.S. economy are increasingly charging inflated and back-end fees to households and families. This new “fee economy” distorts our free market system by concealing the true price of products from the competitive process.

Specifically, the CFPB cited research demonstrating that banks and credit card companies earn nearly $30 billion a year from charging punitive fees to consumers.

  • In 2019, the major credit card companies charged over $14 billion each year in punitive late fees.
  • In 2019, bank revenue from overdraft and non-sufficient funds (NSF) fees surpassed $15 billion .

Public Input Needed

The CFPB is in the early stages of crafting regulations that would protect consumers from these egregious fees.

The CFPB is interested in hearing about people’s experiences with fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan, or payment transfers, including:

  • Fees for things people believed were covered by the baseline price of a product or service
  • Unexpected fees for a…



Andy Spears

Writer and policy advocate living in Nashville, TN —Public Policy Ph.D. — writes on education policy, consumer affairs, and more . . .