A Word From CBA By Mike Brown, Regional President Alpine Bank 2021-2022 CBA Chairman Feature Significant Regulatory Changes Federal regulators are zeroing in on a number of issues affecting our industry. And when it comes to two very different areas – fees and climate change – the Fed may want to change how we do business. Bank Fees In April, the Colorado Bakers Association joined the ABA and other banking associations in challenging the CFPB RFI regarding fees. The bureau appears to have already determined that many bank fees are anti-consumer. The RFI asked for “stories” about fees that “you believed were covered by the baseline price,” or “unexpected” or “seemed too high for the purported service,” and closed by asking how the bureau should “address the escalation of excessive fees.” CFPB clearly wants justification to take action. The market for consumer financial services is competitive, and fees are disclosed to consumers in multiple ways. The bureau’s testing and reports show that consumers understand these disclosures and appreciate the products and services provided even if they must pay fees for them. This comes on the heels of OCC Acting Director Michael Hsu calling for banks to pursue what he called “proconsumer” changes to their overdraft programs, noting that they should “resist limiting the extent of their reforms by taking a profit-oriented approach and reverse-engineering costs to meet predetermined revenue targets.” On March 31, the FDIC released the spring edition of the Consumer Compliance Supervisory Highlights. According to the FDIC, “failure to disclose material information to customers about re-presentment practices and fees” may be deceptive. The failure to disclose material information to customers “may also be unfair if there is the likelihood of substantial injury for customers, if the injury is not reasonably avoidable, and if there is no countervailing benefit to customers or competition. For example, there is risk of unfairness if multiple fees are assessed for the same transaction in a short period of time without sufficient notice or opportunity for consumers to bring their account to a positive balance.” Regulators are giving every indication that they expect the industry to make significant changes regarding overdrafts, www.coloradobankers.org 2
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