On August 6, 2024, the CFPB published a blog post about its current efforts in combatting junk fees that hamper fair, transparent, and competitive markets and to ensure that companies don’t use fine print to escape accountability when they break the law. Additionally, the CFPB has issued an Amicus Brief in support of a group of plaintiffs who sued Nationstar Mortgage LLC for charging illegal junk fees.
The CFPB has addressed illegal junk fees in a variety of consumer financial markets, including bank accounts, credit cards, and international money transfers, and took further action this week to address fees associated with taking out and paying a mortgage. In an Amicus Brief issued to support the plaintiffs against Nationstar, the CFPB explained that debt collectors can’t charge “pay to pay” fees for people to pay their mortgage online or by phone if the borrowers didn’t expressly agree to those fees in their mortgage agreements and there isn’t any law affirmatively allowing them. Consumers claim that Nationstar improperly charged consumers a fee to tell them how much they would have to pay to fully pay off their mortgage when the original mortgage contract doesn’t mention such a fee. The mortgage servicer claims that federal law says it can charge them.
The CFPB, through the Amicus Brief, said that Nationstar’s argument is wrong. The CFPB’s amicus brief explains why a contractual provision requiring notice and an opportunity to cure cannot be applied to the FDCPA claim, and why Nationstar violated the FDCPA by collecting payoff statement fees that were neither expressly authorized by the agreement creating the debt nor permitted by law.
Read the CFPB’s blog post here.
The Amicus Brief can be found here.