The Consumer Financial Protection Bureau (CFPB) closed its public consultation on unwanted charges on April 11. Two days later, the agency published a blog post highlighting the billion-dollar savings consumers will soon see from the elimination of insufficient funds (NSF) fees on their checking accounts.

The CFPB engages in advocacy efforts to encourage banks to reduce NSF check and overdraft fees. However, the agency is “looking closely at whether and when charging these fees may be illegal”, suggesting further legal action is on the table.

The next steps in the investigation of “unwanted fees” are not yet clear, but rulemaking and enforcement action are distinct possibilities. However, the CFPB could face three challenges, given the nature of this survey and the data available.

1. One size does not fit all

Since the announcement of this investigation, the CFPB has lumped together different types of fees, with different purposes and different industry players involved. These include regulated and unregulated fees. For example, credit card charges are subject to strict disclosure requirements and caps established in the Truth in Lending Act (TILA) and the CARD Act. Similarly, overdraft fees are subject to transparency obligations. This is different from other service fees like the “resort fee” mentioned by the CFPB which may not be regulated. So the agency could face an uphill battle if it tries to adopt the same measure for all these different fees.

2. Competition

The CFPB recently published two blog posts, one in February and one in April, announcing that some banks have waived their NSF fees, or are considering doing so. The agency also released a report on March 29 with data on credit card late fees showing that these fees have declined over the past few years and were below the maximum cap. Additionally, the report also acknowledged that there are more and more companies offering credit cards with no late fees. While the CFPB praised itself for helping to reduce or eliminate NSF and overdraft fees, the data also suggests that these lower (or zero) fees may be the result of a competitive marketplace. New products are coming to market due to this competitive environment with low or no fees, including, for example, buy now, pay later (BNPL) or Bank On accounts. These are new deposit accounts with low or no fees, but with basic functions. Thus, the success claimed by the CFPB in reducing certain costs may be the result of healthy competition due to the innovation of FinTechs or traditional lenders. This would make market intervention more difficult to justify.

3. The alternative scenario

The CFPB has many options if it decides to intervene. It can lower the cap on credit card fees, it can pass new rules requiring greater disclosure of fees, or it can open new investigations against specific companies, to name a few. The problem the agency may face is that by waiving a commission, they may also eliminate or limit access to the associated service, such as overdraft on a deposit account, which many clients find useful. Additionally, companies may be required to remove or reduce a fee, but they could create new fees or increase the prices of other services to offset the economic impact. So, by looking at a small part of a company’s business, the CFPB can consider remedies that might work in the short term but not necessarily in the long term.

Read more: CFPB report shows credit card late fees falling, below set limits