CBA Outlines Regulatory & Legislative Recommendations Ahead of CFPB Semi-Annual Address to Congress

In new letters sent to the Senate Banking Committee and House Financial Services Committee ahead of the Consumer Financial Protection Bureau’s (CFPB) semi-annual report to Congress this week, the Consumer Bankers Association (CBA) outlined legislative and regulatory recommendations necessary to fulfill the Bureau’s responsibility of protecting consumers and supporting a competitive financial services marketplace

Since the Bureau’s inception, CBA has advocated for policymakers to ensure the CFPB is a steady and consistent regulator. Unfortunately, under the leadership of Director Chopra, the agency has taken public actions with minimal input from the very industry the Bureau is tasked with overseeing – all while publicly attacking banks and eroding consumer confidence.

As the letters state, promulgating new rules without transparency or industry engagement can have serious implications for banks and the millions of consumers they serve:

“Recent actions taken by the Bureau have established new regulatory requirements for banks outside of the rulemaking process required by the Administrative Procedure Act, and, under the current leadership, the Bureau seeks minimal input from the industry it is responsible for overseeing. This is in stark contrast to the open dialogue that the banking industry experienced with multiple previous CFPB Directors, regardless of party affiliation.”

Recognizing our shared commitment with the Bureau and Congress to protect all consumers and promote a fair, transparent, and competitive marketplace, the letters go on to say:

“Consumers are only protected when financial products and services are subject to consistent consumer protections, not changes to regulation due to one particular ideological view. CBA stands ready to work with Congress and the CFPB to implement legislative and regulatory improvements to the Bureau to achieve these goals.”

What We’re Advocating For

• Rejection of Credit Card Late Fee Proposal – CBA explained the significant negative impacts of the CFPB’s Notice of Proposed Rulemaking (NPRM) on credit card late fees, highlighting how the proposal would drastically alter the credit card late fees landscape to the detriment of consumers’ long-term financial health.
• More Time to Implement Section 1071 of Dodd-Frank Act – CBA reiterated the need to extend the implementation deadline for this new rule from 18 months to 36 months to ensure banks are well-positioned to comply with new requirements. The letter also outlined why the $5 million annual revenue threshold for small businesses is too high.
• Clarification of and Guardrails Around CFPB’s UDAAP Authority – CBA called on Congress to enact due process reforms under UDAAP consistent with those previously adopted in 2020 but reversed under current leadership.
• Structural CFPB Reform – CBA applauded the passage of the CFPB Transparency and Accountability Reform Act, which includes four bills which would bring greater accountability and transparency to the Bureau and ensure proper checks and balances are applied to a regulator with such a broad scope and influence over the financial services marketplace.

To read the full letters sent ahead of Director Chopra’s semi-annual address to the Senate Banking Committee and House Financial Services Committee this week, click HERE and HERE.

Background

To read CBA’s letter sent to Congress ahead of Director Chopra’s semi-annual address in December, click HERE.