The Week Ahead: Congressional Spotlight on Combating Rental Fees

On Thursday, May 9, the Senate Banking Committee will host a hearing titled “Consumer Protection: Examining Fees in Financial Services and Rental Housing” at 9:00 a.m. Central.

The Consumer Financial Protection Bureau (CFPB) recently released published its Supervisory Highlights detailing efforts to eliminate junk fees paid by mortgage servicers, in addition to other illegal practices. CFPB investigations discovered servicers charging illegal junk fees, such as prohibited property inspection fees; sending false warnings to homeowners; and breaking loss mitigation standards that help struggling borrowers stay in their homes. In response to the CFPB’s findings, financial institutions returned junk fees to borrowers and discontinued illegal activities.

In October of last year, the CFPB revealed that its examination work from February to August of 2023 resulted in a $140 million return to consumers for illegal junk fees in the areas of bank account deposits, car loan servicing, and international money transfers. Since then, the CFPB’s regulation of junk fees has resulted in almost $120 million in extra junk fee refunds for bank account deposits.

For “Consumer Protection: Examining Fees in Financial Services and Rental Housing,” the Senate Banking Committee has invited Adam Rust, Director of Financial Services for the Consumer Federation of America, and Santiago Sueiro, Senior Policy Analyst for UnidosUS, to testify on the topic and share their insight into the topic.

Protecting those in the rental market

Approximately 44 million-plus households, 35% of the U.S. population) currently live in rental housing, and while federal laws such as the Fair Housing Act and the Fair Credit Reporting Act offer renters certain focused protections, there is no comprehensive set of federal laws protecting renters. Instead, renters are protected by a patchwork of state and local laws that renters and rental housing providers must navigate.

Last July, the Biden Administration announced a new front in the government’s crackdown on junk fees by focusing on rental housing. From repeated rental application fees to surprise “convenience fees,” millions of families incurred burdensome costs in the rental application process and throughout the duration of their lease. These fees are often more than the actual cost of providing the service, or are added onto rents to cover services that renters assume are included—or that they did not even want.

By working with industry stakeholders, the Biden Administration worked with the following to help alleviate junk fees in the rental market:

  • Zillow launched a Cost of Renting Summary on its active apartment listings, empowering the 28 million unique monthly users on its rental platform with clear information on the cost of renting. The tool enables renters to find out the total cost of renting an apartment from the outset, including all monthly costs and one-time costs including security deposits and application fees.
  • com announced the launch of a new calculator to help renters determine the all-in price of a desired unit, including all up-front costs, as well as recurring monthly rents and fees.
  • com began requiring owners to disclose all refundable and non-refundable fees and charges upfront in their listings. The site launched a new “Trusted Owner” badge that protects renters from being charged junk fees by identifying owners who have a history of adhering to best practices, including commitment to reasonable fee limits, no junk fees, and full fee disclosure.

Meet the speakers

Rust is the current Director of Financial Services at the Consumer Federation of America, a non-profit association of nearly 250 national, state, and local pro-consumer organizations. His portfolio covers non-bank credit, payments, and banking oversight. In his role, Rust advocates for the interests of consumers in areas at the nexus of emerging technology and finance, including the use of artificial intelligence (AI) and digital assets. Most recently, Rust was a Senior Policy Advisor at the National Community Reinvestment Coalition, where he pursued the organization’s policy agenda for fintech, consumer lending, and payments. From 2005-2020, he was Director of Research at Reinvestment Partners (RP), an advocacy and community development non-profit organization in Durham, North Carolina. While at Reinvestment Partners, he led a socially responsible LLC that enrolled over one thousand workers into FDIC-insured bank accounts.

He has served two terms on the Board of Directors of the US Faster Payments Council. After publishing a book on community development policy for manufactured housing, he represented consumers on the Department of Housing and Urban Development’s Manufactured Housing Consensus Committee.

Sueiro serves as Senior Policy Analyst at UnidosUS, sharing his expertise in banking issues, and focusing on policies that protect low-income consumers and Latinos from predatory practices, as well as policies that promote access to safe and affordable products.

Last year Sueiro testified before Congress at a hearing focused on overdraft fees, and has also written numerous comment letters on bank topics including the Community Reinvestment Act. His writings have also been featured in media publications including in Non-Profit Quarterly in a blog about banking inequities and policies that can help.

Click here for more information or to register for the Senate Banking Committee Hearing “Consumer Protection: Examining Fees in Financial Services and Rental Housing.”

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Picture of Eric C. Peck

Eric C. Peck

Eric C. Peck has 25-plus years’ experience covering the mortgage industry, most recently serving as Editor-in-Chief for National Mortgage Professional Magazine. He graduated from the New York Institute of Technology, where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books, and has served as Copy Editor for Entrepreneur.com.
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