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New CBA Video: Bank-led Innovations Empower Consumers With The Transparency & Choice They Demand To Meet Their Financial Needs
On Thursday, the House Subcommittee on Consumer Protection and Financial Institutions will hold a hearing on the overdraft marketplace. The hearing comes amidst the backdrop of the CFPB’s ongoing examination of bank fees, which also include overdraft. Ahead of these events, the Consumer Bankers Association (CBA) today released a new video to correct misinformationsurrounding bank fees, to underscore banks’ commitment to providing transparency and choice, and to highlight some of the bank-led innovations designed to meet evolving consumer demands.
In the video entitled The Power Of Choice, CBA conveys the benefits afforded to consumers within the highly competitive and well-regulated banking industry today:
- COMPETITION: “Many of the nation’s nearly 5,000 banks now offer more products and services than ever to meet the unique needs of the families they serve.”
- CHOICE: “Over the past year, a growing number of banks have unveiled innovative financial tools designed to help consumers access an emergency safety net when they need it most, all while helping them to avoid unintended fees.”
- TRANSPARENCY: “Because banks are required by law to clearly communicate the many features’ consumers can choose from and the fees that could be associated with them, families are more empowered than ever before to make informed financial decisions.”
Correcting Misinformation Surrounding Bank Fees
In addition to highlighting bank-led innovations, CBA is also working to combat misinformation regarding fees charged for all products and services offered by banks. Specifically, in response to the CFPB’s recent inquiry, CBA is working to underscore the following key takeaways for policymakers to consider in its upcoming comment letter to the Bureau:
- Well-Regulated Industry: As opposed to many segments of the economy where Americans are charged fees, fee charges and disclosures in banking are heavily regulated at the federal and state levels. In some instances, these oversight requirements have been in place for more than half a century.
- Highly Competitive Landscape: Because the banking industry is among the most competitive in the world, banks are incentivized to constantly review and modernize products and services – and potential fees that come along with them – to meet evolving demand and attract new customers, fostering even greater transparency and choice for consumers.
- Empowered Consumers: Thanks to new bank-led innovations, consumers are now empowered with the financial tools they need to anticipate or avoid fees. In contrast to many fees charged by other industries, banks are required by law to disclose potential fees before a consumer chooses a product or service. Characterizing all fees as equal directly undermines long-standing efforts from policymakers and banks to adequately disclose terms and conditions to consumers.
Bank Innovations Fueling Industry-Wide Transformation
Driven by a commitment to meeting evolving consumer demands, America’s leading banks have unveiled innovative financial tools to provide consumers greater choice and flexibility to avoid unintended fees – including ensuring access to the emergency safety net overdraft can provide. Some of these bank-led innovations, which have occurred without regulatory intervention, and collectively represent a transformational shift across the industry, include:
CBA long has urged policymakers to recognize and encourage these bank-led innovations while also warning of the consequences further regulatory action would have on hardworking families who knowingly use and value emergency safety net products like overdraft.
- Following the CFPB’s launch of a new initiative examining fees charged by banks and other financial institutions, CBA’s President and CEO Richard Hunt said: “This is fuzzy math at its best and political theater at its worst … To best serve America’s families and small businesses, the Bureau has a responsibility to communicate with clarity and precision.” To read the full statement, click HERE.
- Responding to the Bureau’s renewed focus on fees charged by banks, CBA has worked to correct the record and deliver the facts about how emergency safety net products like overdraft are valued by millions of hardworking families in times of need. To learn more, click HERE.
- To read the key findings from Competition Drives Overdraft Disruption, a comprehensive analysis of the overdraft marketplace conducted by the global intelligence firm Curinos, click HERE.
- To learn more about how banks are working to deliver more choice and flexibility to hardworking families while helping them avoid unintended fees, click HERE.