Prepared Remarks of CFPB Director Rohit Chopra at the Public Meeting of the Strike Force on Unfair and Illegal Pricing

Thank you, Chair Khan, for convening today’s meeting of the Strike Force so we can continue to take action against companies that exploit and gouge families and honest businesses in our country.

I want to briefly share a few updates on the work of the Consumer Financial Protection Bureau.

First, private equity price gouging. Across the law enforcement community, there has been widespread recognition that the status quo approach to fines and penalties is often seen as a cost of doing business. Private equity investors have caught on to this.

When an investor, like a private equity fund, takes control over a company and directs the company to illegally gouge or mistreat consumers, that investor is often long gone once law enforcement comes around.

That’s why the CFPB is investigating the role of not just individual executives, but also the investors, like private equity funds, that call the shots. The facts might reveal that the controlling investor or other investment vehicle may also be liable for breaking the law.

As law enforcement, we simply can’t turn a blind eye to the private equity price gouging that we’re seeing. By uncovering facts that reveal who is calling the shots to commit crimes against consumers, we can better put a stop to these unlawful practices.

Second, junk fee scams. The CFPB continues to lead many efforts to crack down on junk fees. Junk fees are those unavoidable, surprise, excessive, or unnecessary charges imposed for fake or even worthless services.

The CFPB has taken legal actions and put forth rules that will save families and businesses billions of dollars every month on bank accounts, credit cards, and more. But we’re not stopping there.

Just last week, we issued a report about school lunch junk fees imposed by companies that process payments for child’s school lunch. That’s chipping away money for families who must pay big fees to reload their child’s school lunch card.

These junk fees are hitting small businesses too. Mortgage lenders report to us that the costs for credit reports and credit scores have skyrocketed, sometimes by 400%, since 2022. It’s not because it’s gotten more expensive to make these reports and scores, it’s because these companies can get away with it. The CFPB is looking at using existing laws on the books to make sure these fees, which get passed on to consumers, are “fair and reasonable.”

Finally, credit cards. For many Americans, credit cards are used to cover the costs of basic goods. As we heard earlier, consumers are often seeing higher costs at checkout, often out of exploitative pricing and greed rather than market forces. But they’re not just ripped off at checkout, many are getting ripped off on their credit card bill, too.

According to CFPB analysis, we found that credit card interest rate margins hit an all-time high. While overall market interest rates have gone up, a number of credit card companies have hiked their interest rates way more than those overall market rates. As credit card interest rates have soared, often at 30% or more, Americans have been paying over $100 billion in interest each year.

The CFPB is closely scrutinizing all aspects of the credit card market. From bait-and-switch rewards tactics to credit reporting collusion to interest-rate backdating on medical credit cards, this trillion-dollar market is high on our radar. We expect that our work to jumpstart competition and crack down on questionable tactics that will save Americans billions.

So, in sum, the news that inflation has cooled in recent months is good for families and good for our economy as a whole. Across the federal government, agencies are working hard to bring down the costs of core expenses that families face.

But we know that too many families are still being squeezed, especially when some companies continue to get away with charging illegal fees to pad their profits.

The CFPB is going to continue to work to end junk fees, bring down costs, and to promote a more fair and competitive economy.