Mesack: CFPB’s latest ‘guidance’ masks ‘major power grab’
The CFPB Wednesday released an advisory opinion for financial institutions it supervises – which includes credit unions with more than $10 billion in assets – to provide consumers with information about their accounts “in a timely manner” and without a fee. NAFCU Senior Vice President of Government Affairs Greg Mesack argued this approach “is another instance of the bureau overstepping its authority and masking a major power grab as simple ‘guidance.’”
“The bureau is enacting a substantial policy change while making a mockery of the [Administrative Procedure Act (APA)] process that was created to protect Americans from regulatory overreach – mandating solutions to nebulous problems without seeking input from the public or affected stakeholders. This is why Congress needs to reform the CFPB and ensure there are proper checks and balances in place to hold the bureau accountable to its mission and proper processes,” Mesack said.
In the opinion, the bureau outlines several types of information financial institutions should provide quickly and without fees upon a consumer’s request under section 1034(c) of the Dodd-Frank Act, including information that would appear on periodic statements or online portal accounts, such as:
- the balance in a deposit account;
- interest rate on a loan or credit card;
- payments and transactions information;
- recurring transactions; and
- terms and conditions of the account, including fee schedules.
The bureau also listed exceptions to the type of information that financial institutions are not required to share. While initial requests for covered information should be provided for free, consumers may be charged for repeated requests for the same information.
The advisory opinion does not explicitly indicate what constitutes a long wait time in violation of the rule, but directs financial institutions to existing requirements, such as those under Regulation X, to help inform what the bureau means by “in a timely manner.”
The bureau indicated it will not seek monetary penalties for violations prior to Feb. 1, 2024.
As the bureau – and other agencies under the direction of the Biden Administration – continues to target “junk fees,” the CFPB Wednesday also issued a special edition of supervisory highlights on the topic. It flags fake paper statements, auto loan add-on products, and international money transfers. In addition, the CFPB released a data spotlight on non-sufficient fund (NSF) fee practices.
NAFCU will continue to fight against the CFPB’s war on Main Street America and its misleading campaign to lump legitimate financial services fees – that are clearly disclosed to consumers in account agreements – into “junk fees.”
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