- Illinois AG Kwame Raoul led a coalition of 23 state AGs in calling upon the CFPB to prohibit mortgage servicers from imposing convenience fees on consumers, in response to the CFPB’s recent Request for Information Regarding Fees Imposed by Providers of Consumer Financial Products or Services.
- In their letter, the AGs expressed numerous concerns regarding such fees, including that consumers have no choice in the selection of their mortgage servicers because mortgages are often packaged and sold in the secondary securities market; fees charged by mortgage servicers are inconsistent; and some servicers attempt to impose fees not authorized by the original mortgage documentation. Further, convenience fees for phone or web payment often have no relationship to the actual processing cost, and servicers are effectively charging twice for the same service by assessing an additional fee.
- The coalition urged the CFPB to either consider prohibiting mortgage servicers from charging convenience fees, or in the alternative, to ban fees that exceed that actual, documented cost of processing a transaction.