WASHINGTON—NAFCU and CUNA have each sent letters to the CFPB in response to the Bureau’s request for information on relationship banking and customer service, with CUNA suggesting the CFPB’s move is “legally dubious.”
In NAFCU’s letter, Senior Counsel for Research and Policy Andrew Morris wrote, “By virtue of their cooperative structure and not-for-profit mission, credit unions are naturally inclined to embrace relationship banking and high touch business models.”
The letter suggested that a key factor driving the growth and success of credit unions is the industry’s emphasis on relationship banking with continued investment in brick-and-mortar branches and staffed call centers.
Morris also said that many credit unions are pairing digital strategies with their traditional customer service, noting that the CFPB should not “discourage the use of digital channels for responding to customer inquiries” because they can improve service models. Instead, Morris argued that the Bureau should “accommodate the use of new technologies that allow smaller community financial institutions, such as credit unions, to make the most of limited resources while still offering high quality customer service.”
Additional Points Made
Additionally, in the letter, Morris:
- Reiterated how inequitable allocation of Regulation E responsibilities in the peer-to-peer context has strained credit union staff resources
- Emphasized that the development of innovative personal finance products can be achieved with responsible access to consumer data, but such innovation must be fair and safe for the consumer and the credit union
- Advocated for a level playing field between credit unions and fintech companies, arguing that the Bureau needs to hold fintech companies accountable for substandard customer service practices that could harm consumers or put the burden of fixing customer problems onto credit unions
CUNA: Move is ‘Legally Dubious’
In its letter, CUNA stated, “While customer service is a critical element of any successful financial institution and credit unions strive to provide the best in the market, we are concerned the CFPB’s interpretation that Section 1034(c) authorizes it to get in the middle of customer-financial institution relationships and set explicit standards for ‘customer service’ in a general sense is legally dubious.”
The CFPB issued an RFI related to section 1034(c) of the Dodd-Frank Act, a provision requiring large financial institutions to comply with a consumer’s requests for certain information concerning the consumers’ account, CUNA noted.
In the letter, CUNA noted that section 1034(c) does not prescribe specific methods on how to comply with this provision other than for information to be provided “in a timely manner.” This provision also does not directly relate to “customer service” or “relationship banking,” the focus of the RFI.
Need for ‘Careful’ Evaluation
“When considering regulatory action, the Bureau should carefully evaluate and consider the impact its policy decisions may have on consumers’ available options for financial services. Prescribing one-size-fits-all customer service standards runs the risk of straining credit unions finite resources and would lead to a growing homogenization within the banking sector,” the letter adds.
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