Michigan Attorney General Dana Nessel joined two multi-state actions to eliminate unnecessary bank fees.
“We know the costs of goods and services are at an all-time high,” Nessel said. “That’s why it’s more important than ever to fight companies that charge fees that ultimately hurt the customer more than offset their own operating costs.”
The first was a call for consumer banks to eliminate overdraft fees. The coalition of attorneys general is calling on the CEOs of JPMorgan Chase, Bank of America, US Bank and Wells Fargo to eliminate all overdraft fees on consumer bank accounts.
Nessel is asking every bank to eliminate overdraft fees by this summer. She said overdraft fees have disproportionately affected vulnerable families and communities of color by putting them further into debt.
“Making overdraft fees that can sometimes be more than five times the amount of the original purchase is heinous,” Nessel said. “By eliminating these fees altogether, banks will show that they care about the financial well-being of their customers as much as they care about themselves.”
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Calls to ban mortgage officers from charging convenience fees
Nessel also joined a coalition of 22 attorneys general urging the Consumer Financial Protection Bureau to ban mortgage officers from charging convenience fees.
The coalition is urging the CFPB to assess convenience fees in the mortgage sector. They argue that the charges are unfair and abusive because homeowners have no choice over their mortgage officers.
“Convenience fees are abusive and ultimately pay mortgage servicers twice. It is unfair that consumers are faced with additional charges based on how they decide to pay their bills,” Nessel said.
The attorneys general point out that many consumers are considering entering into a long-term relationship with a specific financial institution. However, many mortgages and their servicing rights are sold in secondary markets and may be sold multiple times over the course of the loan.
Consumers do not know which company will service their mortgage and do not have the ability to change service. The letter states that the CFPB’s further assessment of the discretionary fees charged by repairers is warranted due to the length of mortgages associated with consumers’ lack of choice of repairers and the fact that some repairers have attempted to impose convenience charges even when not authorized by the original loan documents.
The coalition is also concerned that convenience fees exceed their true cost to accept payments online or over the phone.
The attorneys general argue that a repairer being able to charge additional fees for the performance of its primary function is fundamentally wrong. Mortgage managers have already been compensated for the costs of accepting payments when they enter into the original loan or choose to acquire service rights for the loan. By charging a convenience fee, mortgage servicers essentially get paid twice when they accept a payment.
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