The Consumer Financial Protection Bureau (“CFPB”) has taken major steps to combat hidden or unnecessary charges, often called “junk fees,” that many consumers unknowingly pay. These fees, which can significantly increase over time, disproportionately impact low-income individuals. Since its founding in 2011 following the financial crisis, the CFPB has sought to protect consumers from predatory financial practices. Over the years, it has strived to increase transparency and fairness in financial markets, aiming to save Americans an estimated $19.5 billion annually.[i]
The CFPB’s enforcement efforts date back to its early years. In 2016, it introduced regulations targeting payday lending abuses, requiring lenders to assess borrowers’ ability to repay before issuing loans. A year later, in 2017, it fined Wells Fargo $100 million for creating unauthorized accounts and charging customers fees without their consent. These early actions set the stage for a more comprehensive crackdown on excessive fees.[ii] By 2022, the agency shifted its focus toward overdraft fees and credit card late fees, targeting the banking industry’s long-standing reliance on these revenue streams.
A significant milestone was the CFPB’s proposal to cap credit card late fees at $8 for large issuers, addressing excessive penalties that had little relation to actual service costs. Historically, financial institutions defended these fees as necessary to cover operational expenses, but CFPB research found that these charges far exceeded actual costs. Similarly, the agency investigated overdraft fees, which have long been a primary source of bank revenue at the expense of consumers. Under a new rule set to take effect in October 2025, overdraft fees will be limited to $5 or must reflect the bank’s actual costs, a change projected to save consumers $5 billion annually.[iii]
Beyond banking, the CFPB has tackled hidden fees in industries such as mortgages, auto loans, and prepaid cards. Many of these fees were undisclosed upfront, leaving consumers vulnerable to unexpected costs that strained household budgets. The agency also focused on public awareness, launching consumer education initiatives to help individuals recognize and avoid these financial traps.
In addition to issuing new regulations, the CFPB has taken legal action against companies engaging in deceptive practices. One of the most significant cases involved a $1.8 billion settlement with credit repair companies, including Lexington Law and CreditRepair.com, for charging illegal upfront fees and misleading consumers with false claims. This case resulted in financial relief for 4.3 million Americans.[iv] The CFPB has also urged state governments to play a larger role in enforcing consumer protection laws, recognizing that state-level action can be crucial in ensuring financial fairness.[v]
With the Trump administration’s return to power, the future of the CFPB’s efforts to combat junk fees is now uncertain. Acting CFPB Director Russell Vought recently announced a freeze on investigations, rulemaking, and enforcement activities, marking a significant departure from the previous administration’s consumer protection priorities.[vi] This suspension directly impacts overdraft and credit card late fee regulations, creating an opportunity for financial institutions to return to previous pricing structures that many consumers found exploitative. Banks and lenders that had begun adjusting to new regulations may now have the flexibility to reinstate fees that were previously under scrutiny.
Additionally, discussions have emerged about reducing the CFPB’s authority or even dismantling it entirely. Advocates of deregulation argue that reducing federal oversight on junk fees could ease compliance burdens for businesses. Consumer protection groups warn that this could result in unchecked corporate practices and increased financial strain on everyday Americans.[vii] During Trump’s first term, his administration weakened the CFPB by cutting its budget and limiting its enforcement power, and similar efforts are expected to resume.[viii] The financial industry has long opposed CFPB regulations, claiming they hinder innovation and restrict consumer choice. Without strong oversight, banks and lenders could find new ways to impose high-cost fees under different names, making it harder for consumers to compare costs and make informed financial decisions.
Despite these changes, some figures within the Trump administration, including J.D. Vance, have indicated that the fight against junk fees may continue through different means. They advocate for a state-led approach, where individual states regulate financial practices instead of relying on federal oversight.[ix] While this could create more localized protections, it raises concerns about inconsistencies and gaps in enforcement. Some states with strong consumer protection traditions may maintain rigorous oversight, while others with more business-friendly policies could allow a resurgence of junk fees.
The CFPB’s efforts to reduce junk fees have significantly improved financial transparency and saved consumers billions. Regulations capping late fees, limiting overdraft charges, and eliminating deceptive financial practices have provided substantial financial relief. However, the shift in regulatory priorities under the Trump administration threatens to roll back these protections, leaving consumers exposed to hidden fees and unfair banking practices. While deregulation could make the financial industry more flexible, history suggests that it also increases financial burdens for vulnerable populations, particularly low-income individuals most affected by predatory fees.
As regulatory changes unfold, consumers must stay informed and advocate for fair and transparent financial policies. If the CFPB’s role is diminished, state governments and consumer advocacy groups may need to take on a greater role in protecting financial fairness. Whether junk fee regulations continue at the state level or through legal challenges, the debate over financial consumer protections is far from over. Consumers must remain vigilant and demand greater transparency from financial institutions to prevent the return of unfair fees on a widespread scale.
[i] See Lilith Fellowes-Granda, The CFPB Is Cleaning Up Junk Fees, Ctr. For Am. Progress (Apr. 9, 2024), https://www.americanprogress.org/article/the-cfpb-is-cleaning-up-junk-fees/.
[ii] See id.
[iii] See Nizan Geslevich Packin, Goodbye Junk Fees, Hello Transparency: CFPB Curbs Overdraft Fees, Forbes (Dec. 12, 2024), https://www.forbes.com/sites/nizangpackin/2024/12/12/goodbye-junk-fees-hello-transparency-cfpb-curbs-overdraft-fees/.
[iv] See CFPB, CFPB Announces Return of $1.8 Billion in Illegal Junk Fees to 4.3 Million Americans Harmed in Massive Credit Repair Scheme, YubaNet (Dec. 5, 2024), https://yubanet.com/usa/cfpb-announces-return-of-1-8-billion-in-illegal-junk-fees-to-4-3-million-americans-harmed-in-massive-credit-repair-scheme/.
[v] See Richard J. Andreano, Jr., CFPB Calls on States to Be More Aggressive in Enforcing Consumer Financial Protection Laws, Consumer Fin. Monitor (Jan. 17, 2025), https://www.consumerfinancemonitor.com/2025/01/17/cfpb-calls-on-states-to-be-more-aggressive-in-enforcing-consumer-financial-protection-laws/.
[vi] See Cora Lewis, Overdraft Fees Cap and CFPB Rule, AP News (Dec. 12, 2024), https://apnews.com/article/overdraft-fees-cap-cfpb-rule-0c15f3cb489ca2d37544ad66c524ce73.
[vii] See Joe Light, CFPB Cutbacks and Medical Debt, Barron’s (Feb 10, 2025), https://www.barrons.com/articles/cfpb-cutbacks-junk-fees-medical-debt-c82adc5e.
[viii] See Claire Dickey, What CFPB Shutdown Means for Junk Fees, Newsweek (Feb. 11, 2025), https://www.newsweek.com/what-cfpb-shutdown-means-junk-fees-2029677.
[ix] See Caroline Melear, A Trump-Vance Administration Is Likely to Continue the Fight Against Junk Fees—They Should Do So Without the CFPB and FTC, R Street (Nov. 7, 2024), https://www.rstreet.org/commentary/a-trump-vance-administration-is-likely-to-continue-the-fight-against-junk-fees-they-should-do-so-without-the-cfpb-and-ftc/.
