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CFPB’s Chopra discusses ‘junk fee’ efforts with SBC; NAFCU pens letter ahead of HFSC oversight
The Senate Banking Committee (SBC) held its hearing to provide oversight over the CFPB yesterday, discussing many points relevant to the credit union industry. The House Financial Services Committee (HFSC) holds its CFPB oversight hearing today.
In his opening statement during yesterday’s hearing, CFPB Director Rohit Chopra focused on the bureau’s current work, which includes the evaluation of emerging technology and artificial intelligence’s impact on the industry, and rulemaking efforts on small business lending data collection, PACE loans, and more. Chopra also acknowledged that the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank highlighted “significant vulnerabilities in the banking system.”
Ranking Member Tim Scott, R-S.C., expressed concerns with the CFPB’s proposed rule to drastically restrict the safe harbor for credit card late fees, which he said would “increase cost to all and decrease credit to those that need it most.” Thom Tillis, R-N.C., echoed these concerns during questioning.
NAFCU has been vocal in its opposition of the bureau’s misleading campaign against “junk fees” – including the onerous proposal – noting the bureau’s overreach and improper processes that add unnecessary restrictions without addressing consumer education needs.
Of note, Bob Menendez, D-N.J., questioned Chopra about peer-to-peer payment service scams, suggesting that the bureau should revisit Regulation E of the Electronic Fund Transfer Act (EFTA). NAFCU has called on the CFPB to prioritize fraud prevention and consumer education rather than issuing new interpretations of the regulation and will continue to monitor the CFPB’s efforts related to Regulation E.
Ahead of the hearing, NAFCU Senior Vice President of Government Affairs Greg Mesack called on the committee “to ensure that the CFPB’s actions endure appropriate congressional scrutiny.” Mesack outlined several top priorities, detailed the unique structure of credit unions, and highlighted the impact the bureau’s regulations have on the industry.
He again reiterated many of these points in a letter sent to the HFSC ahead of its hearing today. NAFCU will monitor today’s hearing – scheduled for 10 a.m. Eastern – and provide any updates via NAFCU Today.