Live on Bloomberg TV

00:00As you pivot here in your effort to eliminate what you'd like to call junk fees to the financial sector to the banking sector what are the most egregious fees you plan to target as a credit cards. Well you know Americans are concerned about rising prices and fees creep across so many products. Last year we reported how overdraft and NSF fees totaled 15 billion dollars. Tens of billions of dollars credit cards mortgage closing costs. And we want to look at all of them to see where we can make sure this market is more competitive honest and upfront. Fifty billion dollars is a lot of money. That was the banking revenue as you mentioned from 20 19 that came only from overdraft fees. It's something that is an issue for a lot of consumers. But the banks actually doing anything wrong. Are they breaking the law. Well in some cases the facts depend on the facts that are going to tell us if they're breaking the law or not. The CPB has done a number of enforcement actions related to overdraft practices related to other feed practices. But I think I'm more concerned about again the creep of fees at the back end rather than advertising the true price to true price upfront. And we see this across the economy. When you buy tickets online when you book hotel rooms and these bank fees add up to tens of billions of dollars that drain money from family budgets. I know you're asking for input. You want public comment on this people to weigh in and describe what their most egregious junk fees are. I just wonder what comes next. Is that going to be followed by fines or other enforcement action against banks. Well in some cases we're going to look at rules. The CFP is a part of the Federal Reserve System. We now administer a lot of the rules that we took over from our partners at the Fed. They relate to bank accounts credit cards and so many other products. But you're right enforcement may be part of this too. If companies are colluding if banks are engaged in practices to manipulate how they can harvest more fees and sometimes that breaks the law they'll have to face a liability for that. How about crypto traders face some pretty hefty fees in the crypto world. I wonder if the CFP plans to go there as crypto in your portfolio. Well you know we want to hear from everybody in terms of all the products that they're dealing with. It's our authorities going to depend on the specific facts. But as more and more people are transferring money whether it's peer to peer payments crypto or anything else we want to hear about the churn and the fees that they're incurring. In some cases those fees may be way out of line with the actual cost or the service that they're getting. What does this mean for the CFP be at this stage of the game as part of the Biden administration. Are you are you looking at a more aggressive posture in dealing with this type of thing than what we saw for instance in the Trump administration. Well look our job is to enforce the law and that's what I am going to do. We want to make sure markets are competitive. You know this week President Biden convened many agency heads and cabinet members and we talked about all we need to do to attack the lack of competition including in the financial sector where a handful of giants often dominate certain markets. So the end at the end of the day we want to make sure that the more we have competition the more that prices are lower that people have more choices that we get more innovation. And that's going to be top of mind for us at this yet. Is this a big conversation about inflation in disguise here. Is that what we're really talking about. I know the administration has found a number of ways to get to inflation in some very narrow focused efforts. Is this one of them. Well I see this as a long standing problem. You know when you go to the supermarket you can see when prices are going up. When you buy things online some people can feel when prices are changing. A lot of times in banking these fees are on the back end. It's advertised as free or low fee. But in reality people get penalized and many financial institutions make big money on this fee creep that we're seeing. And ultimately the more we can make it clearer and competitive. Some of those fees might go away. Some banks are already announcing they're getting rid of overdraft fees and NSF fees. And I think we're going to see more of that. Director you were once the agency's student loan ombudsman. A see you know a bit about this. I wonder why does the Biden administration continue to resist calls to forgive student loan debt from the likes of Senator Elizabeth Warren and other progressives. Well you know that's really a decision for the Education Department. Funding for the CFP CFD enforcement action have canceled debt especially when it's been illegal. The site illegally originated. We'll wait for a decision. I am definitely worried about the return to repayment which is going to start in a few months. We need to make sure that borrowers who have been cheated or borrowers who know their rights and I think we're all waiting for a decision on what might happen when it comes to student loans. Realizing that's not necessarily in your purview but you have a unique view on that. Is it something that you expect to change in terms of the Biden administration's stand on this or should students get used to paying these bills. Well what we'll see. I think what we are already seeing in the past few months is more borrowers are actually getting cancellation of their loans under programs that already exist. Many of the loan servicers made it very difficult for borrowers to actually be able to repay their loans take advantage of these opportunities that were enshrined in law. Some of that is changing for the better. But at the end of the day we still have well over a trillion dollars in student loan debt that many people worry is holding back the entire.

No schedule data available.

CFPB to Crackdown on Hidden Bank Fees

Rohit Chopra, director of the Consumer Financial Protection Bureau, discusses the agency's review of junk fees charged by banks. He spoke with Bloomberg's Joe Mathieu. (Source: Bloomberg)

QuickTake
Explaining the world with Bloomberg News
More episodes and clips