Today, Rep. Blaine Luetkemeyer (MO-3) released the following statement in response to the Consumer Financial Protection Bureau’s opaque announcement that it will begin targeting banks for “junk fees.”

“My colleagues and I on the Financial Services Committee reviewed the CFPB’s strategy during a hearing in March of 2022. As a few of our expert witnesses pointed out, the term ‘junk fees’ does not exist in the financial lexicon and is not a legally enforceable term,” Rep. Luetkemeyer said. “Creating a murky definition and a flashy soundbite does not make for good policy. Director Chopra has chosen to regulate by press release, unfounded white papers, and the threat of enforcement action instead of through rulemaking governed by the Administrative Procedures Act. He continues to invent problems with the ultimate objective of expanding his power.”

Background: On Oct. 11, 2023, the CFPB sent a press release claiming to take a stand for customer service by cracking down on banking models of private institutions. The bureau has coined the term “junk fees” to stigmatize all consumer costs and expand the director’s authority without Congressional approval. Unfortunately, this measure could severely harm small banks and community institutions.

Several attempts to illegally expand the bureau’s power have already failed in court.

The CFPB attempted to reinterpret the Equal Credit Opportunity Act, which relates to housing applicants, as extending to individuals before they apply for a mortgage. A District Court in Chicago struck down the overreach in February of this year.

More recently, a federal judge in Texas recently issued a final judgement against the CFPB for unlawfully expanding its authority when updating the UDAAP manual. The updates included direction for its employees to scrutinize companies for unspecific and subjective standards of anti-discrimination. Left unchecked, the CFPB would grant itself the ability to pick winners and losers in our economy, an offensive proposition to our free market principles.