California Banker Issue 3 2024

State Legislators Scrutinize Bank Fees By Jason Lane, Senior Vice President, Director of Government Relations, California Bankers Association

F

Prior to Biden’s announcement, the Consumer Financial Protection Bu reau (CFPB) had already launched an initiative to scrutinize junk fees in 2022. That same year, the CFPB issued a circular advising that over draft fees associated with authorized positive/settled negative transactions were likely a violation of rules gov erning unfair and deceptive practices. In January of this year, the CFPB issued a proposed rule subjecting

overdraft fees to Regulation Z and the Truth In Lending Act, effectively making them a loan, followed by another proposed rule to prohibit non-sufficient funds fees assessed for instantaneously or near instanta neously declined transactions. California State lawmakers entered the fray this year by introducing three measures. Assembly Bill 2017 (Gray son) specifies that a bank or credit union subject to the examination au

ederal and state lawmakers have been highly critical of bank fees this year. Most of the discourse around bank

fees started with President Biden’s use of the term “junk fees” in his State of the Union Address last year. The Administration’s campaign against fees was primarily focused on the telecom, hotel and lodging, and ticketing industries but over draft and non-sufficient funds fees also came under scrutiny.

10 www.CalBankers.com | CaliforniaBanker