CFPB issues advisory opinion on debt collection fees

June 30, 2022

The Consumer Financial Protection Bureau (CFPB) issued an advisory opinion on fees charged by debt collectors, known as “pay-to-pay” or “convenience fees.”

CUNA filed an amicus brief related to this issue in February in the Ninth Circuit Court of Appeals, stating the CFPB’s strict interpretation of “permitted by law” in the Fair Debt Collection practices is improper. CUNA believes the CFPB’s interpretation will deprive consumers of important, cost-saving choices.

The opinion is effective immediately upon publication in the Federal Register, and:

  • Prohibits the collection of any fee is prohibited unless the fee amount is in the consumer’s contract or affirmatively permitted by law.
  • Affirms a debt collector may only collect a fee when it is authorized by the agreement creating the debt or is “permitted by law.” Where no law expressly authorizes a fee, it is not “permitted by law,” even if no law expressly prohibits it.
  • Clarifies that debt collectors violate the FDCPA when using payment processors who charge unauthorized fees at a minimum if the debt collector receives a kickback from the payment processor.