New Bill Scraps Consumer Protection on 'Returned Item' Bank Fees, Keeping Status Quo for Banks

Alright, let's talk about something that hits close to home for anyone who's ever dealt with their bank: fees. Specifically, those pesky 'returned deposited item' fees. You know, when someone pays you with a check, you deposit it, and then it bounces because their account didn't have enough funds. Sometimes, your bank then charges you a fee for that. Wild, right?

The BCFP's Attempt to Level the Playing Field

So, the Bureau of Consumer Financial Protection (BCFP), which is basically the referee for financial institutions, noticed this was a bit of a raw deal for consumers. They put out a rule, 'Bulletin 2022-06,' aimed at stopping what they saw as unfair practices around these fees. The idea was to make sure banks weren't just piling on charges when a check you deposited came back bad. This rule, published at 87 Fed. Reg. 66940 and later updated, was designed to provide some guardrails and clarity, helping protect folks from getting hit with fees for something that wasn't really their fault.

What This New Bill Does: Hitting the Undo Button

Now, this new Joint Resolution is essentially hitting the 'undo' button on that BCFP rule. It explicitly states that it "disapproves the Bureau of Consumer Financial Protection's rule relating to the withdrawal of the rule relating to 'Bulletin 2022-06: Unfair Returned Deposited Item Fee Assessment Practices'." In plain English? It's wiping that BCFP rule off the books. As the bill puts it, that rule now has "no legal force or effect."

Who Wins, Who Loses?

For banks, this is probably a sigh of relief. They won't have to change their existing practices or worry about new BCFP oversight regarding these specific fees. It means less red tape and no new compliance costs for them. So, financial institutions that charge these 'returned deposited item' fees will continue operating under the old rules, or lack thereof, that the BCFP was trying to rein in.

For you and me, the consumers, it means that the protections the BCFP was trying to put in place are gone. If you've ever been charged a fee because a check you deposited bounced (and let's be real, who hasn't had to deal with a bad check at some point?), this bill means your bank can continue assessing those fees without the new BCFP guidance. This could hit folks juggling tight budgets particularly hard, as an unexpected fee for a bounced check someone else wrote can really throw off your finances. It removes a layer of scrutiny that was designed to prevent potentially unfair or excessive charges from piling up. So, while banks get to keep their current fee structures, consumers might continue to bear the brunt of what the BCFP had identified as 'unfair' practices.