ICBA urged the Consumer Financial Protection Bureau to stop misusing its authority over unfair, deceptive, or abusive acts or practices to undermine federal disclosure rules.

Background: ICBA submitted comments on a CFPB proposed rule to bar financial institutions from charging fees, such as non-sufficient-funds fees, when consumers initiate payment transactions that are instantaneously declined.

Details: In its comment letter, ICBA said:

  • While most community banks do not charge NSF fees for instantly declined transactions, the proposal is an example of the CFPB improperly expanding its UDAAP authority, which has also applied to overdraft rules and determinations of discrimination.

  • The CFPB should not use its UDAAP authority to curtail practices that it disagrees with when those practices are contractually consented to by the consumer and do not meet the statutory definition of abusive.

  • The CFPB’s overly broad use of its UDAAP authority to curtail what it erroneously describes as “junk fees” consistently underestimates the intelligence and agency of consumers and dismisses their ability to understand written disclosures.

  • The CFPB should withdraw the proposal.