The Consumer Financial Protection Bureau (CFPB) issued an advisory opinion on a provision enacted by Congress that prohibits large banks and credit unions from charging excessive fees for basic information about their own accounts.
Under a 2010 federal law, large banks and credit unions must provide complete and accurate account information when requested by accountholders. The CFPB’s advisory opinion clarifies that people are entitled to get the basic information they need without having to pay junk fees.
“While small relationship banks pride themselves on customer service, many large banks erect obstacle courses and impose junk fees to answer basic questions,” CFPB Director Rohit Chopra said. “While the biggest banks have abandoned the relationship banking model, federal law still requires them to answer certain customer inquiries completely, accurately, and in a timely manner.”
Leading up to the 2008 financial crisis, large banks, along with other financial institutions, failed to ensure that 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, one of them required large banks and credit unions with more than $10 billion in assets to provide account information that is in their control or possession, when it is requested by customers.
However, 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 CFPB, from its market monitoring and customer complaints, knows that some large banks charge customers for basic information to manage their finances. They point out that banks give many different names to these fees.
The guidance explains how the CFPB will administer the legal requirement for large banks when it comes to customer service, including how it will evaluate fees imposed on customers for making reasonable requests.
The CFPB does not intend to seek monetary relief for potential violations of Section 1034(c) that occur prior to Feb. 1, 2024.
The Consumer Bankers Association (CBA) said the CFPB should be focused on working with banks to further shared priorities.
“Banks exist to provide consumers and small businesses access to the financial tools necessary to help them achieve their American Dream. Nobody likes to pay unnecessary fees and the reality is that banks operate in one of the most highly regulated and competitive markets in the world. It is deeply concerning to see this Administration once again use rhetoric that fails to reflect this reality and mischaracterizes an industry whose central mission is to strengthen the financial well-being of millions of Americans on Main Streets across this nation,” CBA President and CEO Lindsey Johnson said.
Johnson said the CBA and its members would welcome the opportunity to discuss these shared priorities with Chopra and CFPB officials.