CBA Statement for the Record, House Financial Services Committee Hearing on Regulatory Landscape of Financial Services Industry

Dear Chairman Hensarling and Ranking Member Waters:

The Consumer Bankers Association (CBA)1 commends you for calling today’s hearing to examine the current regulatory landscape of our financial services industry and appreciates your continued oversight of the rules and regulations governing financial institutions. Even as the U.S. banking industry faces an unprecedented regulatory environment, CBA member financial institutions work daily to fulfill the needs of their customers and communities – thus not just contributing to but leading the sustainable economic growth and recovery in the U.S. Consumer and small business lending are growing as banks are meeting new regulatory obligations in a timely manner without imposing burdens on their customers.

Following the financial crisis of 2008, Congress responded with a thorough overhaul of the outdated laws governing our nation’s financial system and created a new set of policies to protect consumers. While many of those changes were necessary for a complex and rapidly changing system that had outgrown its regulations, much of the interpretation of Congress’ intent was left to regulatory agencies to determine how best to apply new laws to the industry. Unfortunately, some steps taken by regulatory agencies in the name of consumer protection and safety and soundness may have run counter to Congress’ intent by limiting consumer choice, transparency, and market competition, while pushing vulnerable consumers to more expensive and often less regulated financial services providers. 

One year ago, the Office of the Comptroller of the Currency (OCC) and Federal Deposit Insurance Corporation (FDIC) issued nearly identical proposed supervisory guidance to clarify the agencies’ application of principles of safe and sound banking practices and consumer protection in connection with deposit advance products (DAP). DAP, which are now no longer being offered to consumers by CBA member institutions, were created to serve consumers in critical need of short-term, small-dollar credit who did not qualify for other traditional credit products. These were not closed-end loans; they were lines of credit that were repaid automatically from a verified recurring direct deposit. The maximum amount advanced was

To read the full Comment Letter, download the PDF.