Views from Washington, D.C. Keeping Tabs on CFPB
Congressman Blaine Luetkemeyer
Do you remember the Consumer Financial Protection Bureau arbitration study that was published in 2015? Te bureau spent years reviewing thousands of arbitration agreements and class action lawsuits in hopes of showing that consumers fared better in court than arbitration. What the study actually showed was consumer disputes were not only settled more quickly under arbitration, but they were awarded more money as well. It went on to show that only class action attorneys benefited from long, drawn out court proceedings. Despite the findings of this study, then CFPB Director Richard Cordray moved forward with a rule to eliminate mandatory arbitration. It was one of the earliest examples of the CFPB moving forward with strictly politically-based actions, regardless of the data or consumer sentiment behind it.
Fast forward to the end of last year. Te bureau once again zeroed in on a banking practice that certain people in President Biden’s administration, their allies in Congress and activists find distasteful, despite the benefit to and support of consumers — overdraſt fees. It was no surprise when the CFPB published a study Dec. 1 of data collected by the CFPB suggesting that because banks earn revenue from overdraſt and nonsufficient funds fees, they are somehow predatory or immoral. Te study claims banks are “deeply dependent” on overdraſt/NSF fees, despite the fact that the CFPB’s study shows banks collected $15.47 billion in overdraſt/NSF fees in 2019, which represents just 2% of overall bank revenue that year. At best, the claim that banks are “deeply dependent” on overdraſt/NSF fees is an overstatement. At worst, and more accurately, this false claim is intentionally
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misleading in an effort to convince people of an opinion that isn’t supported by data or facts.
Te other significant factor the CFPB’s study conveniently ignores is consumer sentiment. A recent study from Curinos, a global data intelligence company, found that American consumers — the same people the bureau is supposedly protecting — understand and see the benefit in having overdraſt fees. It shows overdraſt use has dropped 40% over the last decade and provides evidence that overdraſt fees promote a competitive marketplace. When given the option, Americans want their charges or payments to go through and are willing to pay for the overdraſt protection that makes it happen.
Not long aſter the bureau’s overdraſt study was the released, the CFPB recently
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