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Today, at the CFPB’s field hearing
discussing checking account access, CUNA member Sandy Gogan, senior vice president
of Retail Operations at Park Community Credit Union, testified on behalf of
credit unions. In her testimony, Gogan highlighted that credit unions already
offer many products and services that help members manage finances. When
discussing her credit union’s diverse products and service offerings, she noted
that there is certainly a place for overdraft services. Gogan also outlined how
credit unions, as part of their mission, are empowering members when providing
services and helping their members navigate their many options.
Gogan also expressed the importance of the financial
education that many credit unions offer. She highlighted the programs that Park
Community Credit Union offers to help with financial education, including
efforts to help members understand how to walk through credit reporting issues. Gogan noted that most credit unions have
similar financial education programs.
In his opening remarks, Director Cordray discussed a letter
the CFPB sent to the largest 25 financial institutions encouraging them to have
more options for checking accounts, as
opposed to overdraft services. The letter stated, “We therefore are urging all
financial institutions to make these lower-risk offerings broadly available to
consumers. We urge banks and credit unions that do not currently offer
transaction accounts designed to help consumers avoid overdrafts to do so.”
noted that credit unions already offer many diverse options for checking
accounts, and have consistently worked to find new ways to serve their members.
But we also have concerns about the criticism of overdraft services in today’s
letter, since concerns about this product are not shared by consumers according
to the CFPB’s own data, which clearly illustrates that last year only 1.5
percent of consumer complaints pertained to overdraft.
appreciate that Director Cordray apparently agrees with credit union concerns
about the necessity of contacting credit union members on their cell phones about
important account updates. In his remarks, he stated, “Let me also take a
moment to acknowledge another positive development, which is the decision some
banks and credit unions have made to provide consumers with real-time
information about the funds in their accounts available to be spent. They are doing this through various means,
including online banking and text and e-mail alerts, which can reduce the risks
that consumers inadvertently overspend their accounts.”
appreciate that the CFPB recognizes the importance of communicating with
consumers, specifically through texts, and we hope the CFPB will coordinate
with the FCC who recently made it more difficult for credit unions to do this through
their TCPA Order.
After the hearing, the CFPB also held a credit union roundtable. During the
roundtable credit union representatives and representatives from Kentucky
Credit Union League met with Director Richard Cordray, Deputy Director David
Silberman, and other CFPB staff members. During this discussion the group
discussed checking account issues, and the risks that financial institutions
take when offering them. There was also a lengthy discussion about credit union
consumer education efforts.
CFPB also released a compliance bulletin (2016-01) about consumer reporting,
which addresses compliance issues associated with furnishing information to
consumer reporting agencies. CUNA’s
COMPBLOG will have a detailed analysis of this bulletin. Below are the
documents released by the CFPB today.
The letter sent to the financial institutions is
available at: http://files.consumerfinance.gov/f/201602_cfpb_letter-to-banks-on-lower-risk-accounts.pdf
The guide to select a lower-risk account can be
found at: http://files.consumerfinance.gov/f/201602_cfpb_consumer-guide-to-selecting-a-lower-risk-account.pdf
The guide to manage your checking account can be
found at: http://files.consumerfinance.gov/f/201602_cfpb_consumer-guide-to-managing-your-checking-account.pdf
The consumer advisory about being denied a checking
account can be found at: http://files.consumerfinance.gov/f/201602_cfpb_consumer-guide-to-being-denied-a-checking-account.pdf
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