Advocacy Submits Comments on the CFPB’s NPRM on Fees for Instantaneously Declined Transaction

On March 25, 2024, the Office of Advocacy submitted comments on the Consumer Financial Protection Bureau’s (CFPB) proposed rule on Fees for Instantaneously Declined Transactions.

The proposed rule would prohibit covered financial institutions from charging fees, such as insufficient funds fees, when consumers initiate payment transactions that are instantaneously declined. The CFPB asserts that such fees are abusive.

Advocacy expressed concerns about the CFPB’s failure to properly describe the number of small financial institutions that may be impacted by the proposed rule and nature of the impact under the Regulatory Flexibility Act (RFA). 

In the RFA certification, the CFPB asserted that small entities rarely charged the fees. Advocacy argued that if small financial institutions were not causing the problem, small entities should be exempt from the requirements of the rulemaking. Exempting small entities would prevent them from having to expend valuable resources trying to determine if the rule applied to them.

The CFPB stated that it did not have information about the activities of small entities. Advocacy stated that if the CFPB does not believe that it can exempt small entities, it needs to perform the proper research and convene a SBREFA panel to obtain the necessary information prior to going forward with the final rule.

Advocacy further asserted that the CFPB’s underlying theory that the fees are abusive because consumers do not understand them is problematic.

For more information, please contact Assistant Chief Counsel Jennifer A. Smith at


Comment Letter – Fees for Instantaneously Declined Transactions Docket No. CFPB–2024–0003, RIN 3170–AB16 (PDF, 51.7 KB)

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