CBA Comment Letter on Electronic Disclosures on Mobile Devices

The Consumer Bankers Association (“CBA”) appreciates the opportunity to comment on the Consumer Financial Protection Bureau (“CFPB or Bureau”) notice and request for comment regarding electronic disclosure on mobile devices (“Notice”). Since the beginning of the COVID-19 pandemic, we have seen a dramatic shift in consumer confidence in banking through digital channels. This shift in mobile banking traffic has also come with increased expectations regarding consumer experience. We welcome and support the Bureau’s work to research how consumers currently engage their finances on different mobile devices. We believe this research aligns with the Bureau’s function to make the financial services market work more effectively for consumers. Most importantly, we want to partner with Bureau to ensure this research “enhance[s] the quality, utility and [clarity] of the information . . . collected” and to create a better financial services marketplace.

The Proposed Research is Consistent with the Purpose of the Bureau

Currently, banks rely on older guidance where banking was primarily done with paper or through desktops versus mobile access. However, consumers are increasingly accessing banking services on mobile devices. Section 1021 of the Dodd-Frank Act requires the Bureau to collect, research, monitor and publish information relevant to the functioning markets for consumer financial products and services to identify risks to consumer and proper functioning of such markets. The Bureau’s research on electronic disclosures on mobile devices will ensure consumers continue to be well informed about their financial products and services.

As consumers increasingly rely on mobile devices to engage digitally with financial service providers, it is imperative that financial services providers can innovate and adapt to meet consumer demand. CBA members are committed to consumer protection and diligently work to provide compliant disclosures on electronic devices. As technology continues to evolve, we expect more consumers will use electronic disclosures to engage, and CBA member banks will be at the forefront of this innovation.

The Bureau Should Prioritize Stakeholder Engagement in its Information Collection

Ideally, the Bureau’s research will seek to understand how consumers view electronic disclosures on mobile devices. Many of the disclosure requirements, including model forms, within the consumer financial services regulations were drafted assuming a desktop experience and have not been updated to reflect the new reality that an increasing number of consumers bank via mobile devices today, with additional diversity of devices and digital experiences expected to be utilized for financial services access moving forward. CBA members request clarity on how the CFPB will structure the information collection and to share the methods it intends to use. If the Bureau’s collection process does not reflect how consumers view or access financial information on mobile devices, the data collected may be flawed. CBA member banks also seek clarity on whether the Bureau will collect information from nonbank participants who may feel less constrained by disclosure requirements than supervised entities and, as a result, feel empowered to provide a simple, streamlined mobile experience.

To further enhance stakeholder engagement, CBA member banks recommend the Bureau utilize existing programs within the Office of Innovation (“OI”), including tech sprints. These programs offer unique opportunities for the Bureau to productively collaborate with industry stakeholders. Whether OI programs are part of this research effort, or are executed in parallel, industry stakeholders have the expertise and practical experience to enhance understanding of electronic disclosures on mobile devices.

Any Resulting Guidance Should Preserve Flexibility

In the event the Bureau decides to produce any form of guidance as a result of its research, the guidance should remain high-level and flexible. Technology is constantly evolving (e.g. mobile device screen size and optionality, the use of digital assistants and chatbots, etc.) and banks will need the ability to continue to meet consumer expectations for simple and streamlined mobile banking products, services and experiences.

Any potential guidance will impact a high volume of consumers seeking to bank through mobile channels. Electronic banking agreements can be dozens of pages long addressing multiple complex topics and can present customer experience challenges when having to scroll and agree on a mobile device display. In certain situations, the current guidance may lead banks to forego a more consumer friendly experience than could be possible with updated guidance. The existing uncertainty for banks in this space is expected to become riskier over time due to increasing litigation and compliance risks. However, an updated set of flexible guidance may allow for better and more effective disclosure options for consumers and more clarity for banks.

We thank you for your consideration of these comments. CBA would be happy to discuss these issues further, present on our existing body of research on these issues, and provide any additional information that would be helpful to CFPB staff.

If you have any additional questions or concerns, please do not hesitate to contact André Cotten at 202-552-6360 or at Acotten@consumerbankers.com.

 

Sincerely,

 

Andre’ B. Cotten, Esq.

Assistant Vice President, Regulatory Counsel

Consumer Bankers Association