League Notes CFPB's Focus, Recent Action on 'Fees' Will Harm CUs, Members
Your League’s longstanding concerns with CFPB’s focus on “fees” have only grown this week with the release of the Bureau’s proposed rule lowering the “safe harbor” cap on credit card late fees.
“CFPB is prone to casting a wide net in its efforts to rein in bad actors, and too often, credit unions are unfairly caught up in that net,” said Virginia Credit Union League President/CEO Carrie Hunt. “As small, member-focused financial institutions, credit unions must carefully consider decisions surrounding ‘fees,’ with their aim being to strike a balance between service to members and covering their legitimate business costs.”
“We sounded the alarm last year when it became clear that CFPB was engaged in a ‘fishing expedition’ on fees, trotting out research that targeted late fees, overdraft fees, NSF fees and more,” said Hunt. “CFPB continues to miss this fundamental truth: institutions like credit unions, with fewer economies of scale, cannot absorb all the costs of doing business into the cost of credit. The League is adamantly opposed to any regulation – state or federal – that restricts or makes impossible credit unions’ ability to provide consumer-friendly products and services to their members. Unfortunately for credit unions and our members, CFPB seems determined to pursue that course.”
In a meeting last year with CFPB Director Rohit Chopra, member credit unions and the League discussed the Bureau’s view on fees and the impact of one-size-fits-all regulation, among a host of other topics. We also wrote the CFPB to comment on fees, in general, noting our concerns that the CFPB is attempting to move the financial services market towards a regime where all fees are included in the cost of credit.
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