‘Junk fees' for school lunches can hit 60 cents for every dollar a parent spends, agency says

The Consumer Financial Protection Bureau (CFPB) is examining the fees that parents pay for online deposits into their children’s school lunch accounts. The CFPB found that some parents may pay up to 60 cents in fees for every dollar they deposit, resulting in tens of millions of dollars in fees for payment processors. The agency’s report analyzed data from the top five online payment processors used by schools. It revealed that flat fees ranged from $1 to $3.25 per transaction, while percentage fees ranged from 3.5% to 4.58% per deposit. The CFPB aims to help school districts avoid contracts with financial firms that charge excessive fees. The report also highlighted the economic toll these fees can take on families, particularly lower-income families who qualify for reduced-price lunches. It estimated that payment processors collect between $28 million and $92 million in fees from families paying full price for lunches and between $1.9 million and $10.2 million from families paying reduced prices. The CFPB emphasized the importance of schools offering fee-free payment options and informing parents about all available payment methods and associated fees.