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Are These Treats, or is This a Trick?

Michael Christians • October 28, 2022

Just like the person in your neighborhood that hands out apple slices, circus peanuts or loose change during Beggar's Night, the Consumer Financial Protection Bureau (CFPB) is doing all it can to suck the fun out of Halloween. Let's review a few of the October surprises from our friends at the Bureau.

Availability of Electronic Consumer Financial Account Data

As we blogged about here, the CFPB's Semiannual Regulatory Agenda includes development of a proposed rule to require financial institutions to make transaction data and other information concerning financial products and services available to consumers upon request. The agency believes that making this information available to consumers in a standardized format is increasingly important at a time when many creditors are using alternative data to make credit decisions.

Director Chopra has effectively fired the starting pistol here. In a speech to the FDIC's board of directors earlier this month, the Director stated, "The CFPB will launch the first step of the rulemaking process on personal financial data rights, pursuant to a dormant authority under Section 1033 of the Consumer Financial Protection Act." Dormant being the operative word here. This authority comes from the Dodd-Frank Act, which was signed into law by President Obama just a short 12 1/2 years ago. It's not the fact that you came 12 1/2 years late to the party, it's the fact that you showed up at all.

The Bureau is So Over Overdrafts

On October 26th, the CFPB issued Circular 2022-06 titled "Unanticipated Overdraft Fee Assessment Practices." In case you've yet to come out of your COVID-19 bunker, the Bureau loathes overdraft fees of any kind. The primary focus of this circular was to rage against so called APSN (Authorize Positive, Settle Negative) transactions. This is when a consumer had sufficient funds at the time a debit card transaction was authorized; however, they no longer have sufficient funds at the time it is presented for payment and are charged an overdraft fee as a result.

To make sure financial institutions truly feel like they are getting smacked with a garbage can lid against both sides of their head, that same day the CFPB also put out a compliance bulletin titled "Unfair Returned Deposit Item Fee Assessment Practices." This bulletin clarifies that a blanket policy of imposing a fee for a returned deposit item irrespective of the circumstances or patterns of behavior on the account likely constitutes an unfair act or practice under the Consumer Financial Protection Act.

On second thought, maybe that neighbor handing out loose change during Beggar's Night is not so bad after all. That's one non-interest income generation tactic that has yet to be targeted by the Bureau. On that note, have a safe and happy Halloween!

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