State Associations and the American Bankers Association Challenge CFPB on Fees Inquiry

The Alabama Bankers Association joined the American Bankers Association and fifty other state trade associations in challenging the CFPB in an extensive letter on Monday regarding a recent request for information on fees associated with financial products and services offered by banks including overdraft fees, insufficient funds fees, credit card fees, remittance fees, prepaid account fees and mortgage fees, among others.
“[T]he RFI makes clear that the bureau has already drawn a series of deeply flawed conclusions regarding the market for consumer financial services and the use of fees in the market,” the associations said in a joint comment letter. “An RFI that asks for ‘stories’ about fees that ‘you believed were covered by the baseline price’ or ‘unexpected’ or ‘seemed too high for the purported service,’ and closes by asking how the bureau should ‘address the escalation of excessive fees’ is not a search for the facts, but instead is a solution in search of a problem.”
The groups offered fact-based evidence emphasizing that the market for consumer financial services is “fiercely competitive,” and that as required by laws and regulations that the CFPB itself administers, fees are clearly and conspicuously disclosed to consumers in multiple ways. “Available evidence, including the bureau’s own testing and reports, show that consumers understand these disclosures, and appreciate the products and services provided even if they have to pay fees for them,” we wrote.
Finally, the associations urged the CFPB to “not substitute its own judgment for the sound decisions of consumers who choose to use valuable services offered by financial institutions,” and cautioned that while [the CFPB] has broad authority to initiate a rulemaking to improve disclosures, the bureau has very limited authority to restrict fees substantively and doing so would reduce consumer choice and access to products and services.” Read the letter.