Ryan T. Miller, CIPP/US’ Post

The Consumer Financial Protection Bureau (CFPB) has issued a proposed rule that would, if finalized in its present form, prohibit financial institutions from charging non-sufficient funds (NSF) fees when consumers initiate transactions that are instantaneously or near-instantaneously declined.   The proposed rule would categorize charging NSF fees under the above circumstances as an “abusive” act or practice under the Consumer Financial Protection Act (CFPA). The proposed rule is the latest development in the CFPB’s ongoing effort to scrutinize and eliminate so-called “junk fees.” Comments on the CFPB’s proposed rule are due on or before March 25, 2024. Read more about the proposed rule at the link below.

Learn about the proposed rule to cap overdraft fees and how it could affect consumers and banks alike. Explore the arguments from both sides and the potential impact on access to short-term liquidity. #BankingFees #CCGCatalyst #BankingResearch What’s Happening in the War on Fees: Tyler Brown

Tony has outlined some things to consider with the new CFPB rule to cap late fees. While it might be for FIs of $10B and above, we have to consider how to stay competitive. Let me know your thoughts on the new ruling.

The CFPB’s recent rule capping late fees for credit card issuers is a significant move toward consumer protection. I agree with Tony DeSanctis comments It's a balancing act. While limiting late fees benefits consumers, it is also a challenge for financial institutions from the unrealistic turn around time, to compensation from taking on the additional risk associated with late payments. And, this has unintended financial inclusion consequences, as this could lead to lower approvals, and maybe even credit card closures for those customers that have a hard time staying on top of payments. What are your thoughts on this rule? also thoughts on how to ensure financial inclusion while still managing risk? #financialinclusion #riskmitigation #cfpb

May Colorado prohibit out-of-state banks from charging their home state maximum rate of interest to borrowers located in Colorado? That is the focus of a suit pending in federal court. And yesterday the assigned judge asked a bank regulator: “how is that consistent with federalism?” His answer: “It's consistent with federalism because Colorado has an interest in that transaction, that lending transaction.” The challenged law invokes a little-used federal "opt-out" provision to exclude Colorado from the 1980 Depository Institutions Deregulation and Monetary Control Act, which law otherwise allows state-chartered banks to lend nationally at the interest rates permitted in their home states (giving them “parity” with national banks), even when they lend in states with more restrictive rate caps, but which law also includes a narrow opt out provision. Plaintiffs counter that, under DIDMCA, a loan is made in the state where the bank is chartered, unless the approval and other "key functions" involved in executing the loan took place in Colorado, an argument the judge said was plaintiffs’ strongest. An interesting case so stay tuned. #consumerfinance #parity #bankregulation #interestrates

For too long, banks have been gouging their customers with #overdraft fees that fall through the gaps in current laws governing credit. It has become a major profit generator for the banks, representing billions of dollars a year in revenue, and it comes at the expense of customers with no real power to push back. The Consumer Financial Protection Bureau's new proposal is a major step toward updating the rules and putting a stop to these unfair practices, saving consumers an estimated $3.5 billion or more in fees every year. Learn more here: https://lnkd.in/eKda--57

Three things come to mind with CFPB finalising the rule for credit card late fees capping - This would perhaps now make access to credit even more difficult for people struggling with personal finances or low credit scores. Large lenders would argue against issuing cards as the risk would outweigh the rewards ( amount of late fees chargeable) - How would banks now fill a possible $10B hole in their P&L ? Would this lead to an increase in APR , if so would that push down demand for credit ? - This needs to be implemented in 60 days, which seems like a very quick turnaround for banks to implement this cap on all credit card related systems. How efficient would this execution be ? #Caponlatefees #creditcardissuers

It is not at all surprising that former Comptrollers and senior OCC officials would support the OCC’s overly broad view of federal preemption. However, none of them can point to a federal law or regulation that addresses the consumer protection at issue in Bank of America v Cantero. That NY state law requires 3 percent interest on escrow accounts (why shouldn’t a bank pay interest for such free money?). In other words, federal preemption would not apply some federal law on interest on escrow accounts (because there is none) but rather would permit national banks, unlike their state chartered counterparts, to ignore state laws and earn returns on the funds without any compensation to the depositor. And this is just one state law that the OCC would seek to preempt. The OCC is a prudential, not consumer protection, regulator, and there are many areas where there is no federal law to protect consumers - which is why states act in that void.