WASHINGTON–The Consumer Financial Protection Bureau (CFPB) has issued an advisory opinion regarding a provision enacted by Congress that generally prohibits large banks and credit unions from imposing “unreasonable obstacles on customers,” such as charging excessive fees, for basic information about their own accounts.
The advisory opinion applies only to credit unions of $10 billion or more in assets.
“Under a 2010 federal law, large banks and credit unions must provide complete and accurate account information when requested by accountholders,” the CFPB said. “As many large banks shift away from a relationship banking model that prioritizes high levels of customer service, (the) advisory opinion clarifies that people are entitled to get the basic information they need without having to pay junk fees.”
NAFCU: CFPB 'Overstepping Authority'
In response to the CFPB advisory, NAFCU VP-Government Affairs Greg Mesack said, “The CFPB’s latest advisory opinion 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 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."
CUNA: Significant Concern'
"Credit unions regularly process account information requests from members as part of their normal course of business, including the very same type of requests covered by Section 1034(c). As not-for-profit financial cooperatives, credit unions have a people-first philosophy that prioritizes working with our members to address their financial needs at little to no cost,” stated Jason Stverak, deputy chief advocacy officer for federal government affairs for CUNA. “We have significant concern with the CFPB’s repeated attempts to insert itself between credit unions and their members, and would strongly oppose the Bureau imposing obligations on covered financial institutions beyond what was intended by Congress.”
Fallout from Crisis
According to the CFPB, in the run up to the 2008 financial crisis, large banks, along with other financial institutions, “failed to ensure consumers had access to full details about their accounts. As millions of homeowners struggled to pay their mortgages, many were unable to even determine which companies held their loans.”
When Congress instituted financial reforms in the Consumer Financial Protection Act, the CFPB noted it included a provision in Section 1034(c) requiring large banks and credit unions – those with more than $10 billion in assets – to provide account information that is in their control or possession, when it is requested by customers.
“When large financial institutions charge fees to respond to those requests, they impede customers from obtaining the essential information they are entitled to under federal law,” the Bureau said.
‘Critical to Fix Problems’
According to the CFPB, from its market monitoring and the public’s comments about large banks’ customer service, it is aware that some large banks charge customers for basic information that is “critical to fix problems with their bank account or to manage their finances.”
“Banks give many different names to these fees,” the CFPB stated. “(The) guidance explains how the CFPB will administer the legal requirement for large banks when it comes to customer service, including how the CFPB will evaluate fees imposed on customers for making reasonable requests, such as seeking original account agreements or information about recurring withdrawals from an account.”
The CFPB said it does not intend to seek monetary relief for potential violations of Section 1034(c) that occur prior to Feb. 1, 2024.
The advisory opinion can be found here: Consumer Financial Protection Act; Consumer Account Information.