A trio of banking trade groups have written a letter to the director of the Consumer Financial Protection Bureau, claiming that the Bureau has not properly assessed the potential economic impact of a forthcoming proposed rule regulating overdraft and NSF fees and has not taken the proper steps to issue the rule.
The Background: Overdraft and NSF fees have been in the CFPB’s crosshairs for more than two years. It has issued numerous reports and taken numerous enforcement actions against financial institutions in the area of overdraft and NSF fees.
- It is also planning on issuing a rule related to how overdraft and NSF fees are assessed. That rule was expected as early as last month, but has not yet been issued.
The Concern: Any rule regulating NSF and overdraft fees will have a significant impact on the finances of small banks, the groups say in their letter. That should automatically trigger a review of the rule under the Small Business Regulatory Enforcement Fairness Act (SBREFA), but it does not appear that the CFPB is planning to take such a step, the banks conclude.
- The letter doesn’t make any threats — like suing the CFPB — if the Bureau doesn’t follow the SBREFA process. The groups — the American Bankers Association, America’s Credit Unions, and the Independent Community Bankers of America — merely “urge” the Bureau not to proceed until it assesses the economic impact of the proposed rule on small businesses, as it is required to do so under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Last Word: “If the Bureau intends to use its authority to regulate unfair, deceptive or abusive acts and practices to prohibit charging NSF fees under certain circumstances, that prohibition will apply to all banks and credit unions, regardless of asset size,” the letter stated. Any “rule issued by the Bureau on overdraft or NSF fees will have a significant impact on a substantial number of institutions with assets of $850 million or less,”
