From our President and CEO
CFPB Grossly Misrepresents Banking to Make Noise
At the beginning of 2021, we began to project the potential legislative and regulatory focuses of President Biden’s new administration. We knew the choices for leadership at the regulatory agencies would likely create new headaches for banks, even as those very same banks were continuing to support communities across the country. Unfortunately, our prognostications have been proven correct, and the most recent evidence of this is the renewed attacks on overdraſt protection and nonsufficient fund fees.
On Jan. 26, the Consumer Financial Protection Bureau issued a request for information focusing on these two fees, as well as any other fees issued by banks that might seem “unfair” to consumers. Te CFPB referred to these fees as “junk fees” in the RFI and compared them to the service or resort charges issued by hotels. Tey went
so far as to claim that “Tis new ‘fee economy’ distorts our free market system by concealing the true price of products from the competitive process.” Teir plan is to place pressure on the largest banks in the country, many of whom are already changing their fee structures, in order to create pressure on smaller banks to change as well.
It is hard to fully express the numerous ways in which the CFPB’s characterization of ODP and NSF fees (as well as the “other” fees which they hint at but do not call out specifically) is incorrect, laughable and even irresponsible. As we all know, federal law already requires banks to disclose their fees to customers before they open accounts. Tey cannot be disguised, unlike venue fees. Many fees are waived or refunded by banks to help customers find more stable financial footing. Nowhere does the CFPB acknowledge
that removing these fees will inevitably lead to a reduction in financial services as banks are forced to decline transactions. Instead of welcoming more of the unbanked or underbanked into the dual banking system, we’ll be sending them away, and most may turn to less- than-credible actors.
Te bottom line is the CFPB has grossly misrepresented not only the fee structure but the very philosophy of banking in order to create noise among consumers. Tese fees are easy to attack because the public does not understand the fees’ role in preventing fraud, providing alternatives to payday lenders or ensuring that when your son or daughter needs gas in the middle of the night and doesn’t realize that their account is almost empty, they can still fill up their tank.
We can’t sit idly by while the CFPB makes false accusations about
THE MISSOURI BANKER 5
Max Cook, President and CEO Missouri Bankers Association
“exploitative junk fees.” Every one of us — from the largest to the smallest — needs to rally against these ridiculous claims and make our views known loud and clear. MBA is submitting a comment letter to the CFPB, and we strongly urge your bank to do the same. At mobankers. com, you will find resources to assist you in writing your own comment letters. Comments are due Tursday, March 31.
It may surprise the CFPB that our industry isn’t looking for fees to be issued ad nauseam simply to buffer the bottom line. Rather, we advocate for common sense and letting the free market work for banks and consumers. I sincerely hope banks of every size and from every corner of this nation inundate the CFPB with that message.
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