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October 28, 2014

American Banker: CFPB looks long at checking account access

American Banker reported Monday that a CFPB forum on access to checking accounts held earlier this month has sparked concerns that the bureau "may be seeking to go much further in dictating how and when banks open accounts for consumers."

CFPB's Oct. 8 forum, attended by NAFCU Director of Regulatory Affairs Mike Coleman, focused on the screening practices employed by financial institutions offering checking accounts. During the forum, CFPB Director Richard Cordray raised concerns about overdraft protections, how financial institutions report and use credit scores and how they measure a consumer's credit risk.

To measure a potential member's or customer's credit risk, financial institutions, including credit unions, often use a screening process. Coleman notes this is also an important tool for credit unions to minimize incidences of fraud. "Credit unions have unique relationships with their members and only fit them with the types of accounts and products that best meet their goals," he said.

A CFPB spokesperson quoted in the American Banker article said the bureau is interested "to learn more about how the screening system could be used to help institutions better meet the needs" of consumers.

NAFCU is monitoring this issue for any further action from CFPB on access to checking accounts.