CFPB issues guidance on “excessive” account information fees, returns $140 million to consumers

Agency Rule-Making & Guidance Federal Issues Junk Fees Consumer Protection Fees CFPB

On October 11, the CFPB issued an advisory opinion concerning consumers’ requests for information regarding their accounts with large banks and credit unions (financial institutions). According to the Bureau, Section 1034(c) of the Consumer Financial Protection Act (the “law”) requires insured depository institutions that offer consumer financial products or services and that have total assets of more than $10 billion, as well as their affiliates, to “comply in a timely manner with consumer requests for information concerning their accounts for consumer financial products and services, subject to limited exceptions.” The advisory opinion includes the following guidance and interpretations:

• Requirements of the law apply even if a customer does not expressively invoke the law.
• Requirements of the law apply to consumer requests for information including information that appears on periodic statements or in online portals including: (i) the amount of the balance in a deposit account; (ii) the interest rate on a loan or credit card; (iii) individual transactions or payments; (iv) bill payments; (vi) recurring transactions; (vii) terms and conditions; and (viii) fee schedules.
• The term “supporting written documentation” in the law requires financial institutions to provide, upon request, “written documents that will substantiate information provided in response to consumer questions, or that will assist consumers with understanding or verifying information regarding their accounts.”
• Financial institutions must provide account information and documentation that is in their “control” and “possession.” This excludes (i) confidential commercial information; (ii) information collected to prevent fraud or money laundering or detecting or making any report regarding unlawful conduct; (iii) information required by law to be kept as confidential; and (iv) supervisory information and nonpublic information.
• The law does not contain language stating or suggesting that financial institutions cannot impose unreasonable conditions on consumer information, but there is no reason Congress intended for the law to allow financial institutions to do so. Generally, the Bureau believes requiring fees and obstacles that impede a consumer’s ability to access their rights granted by the law is a violation of the provision. A financial institution could violate this law by imposing “excessively long wait times to make a request to a customer service representative, requiring consumers to submit the same request multiple times, requiring consumers to interact with a chatbot that does not understand or adequately respond to consumers’ requests, or directing consumers to obtain information that the institution possesses from a third party instead,” among other things.
• There is no fixed time limit for an institution to respond to a consumer’s request, but the CFPB does not view the timing requirements of this law to differ from the timing requirements of other applicable federal laws or regulations.
• Responses must provide all information requested accurately to be considered compliant.

CFPB Director Rohit Chopra delivered remarks on a press call, in which he emphasized that the Bureau’s investigations have uncovered many examples of junk fee-related misconduct by large financial institutions. He reminded consumers that financial institutions should not charge them excessive fees when trying to manage their finances. “Congress passed a law a decade ago requiring heightened customer service standards," said Chopra. "To date, this law has not been enforced. We are changing that.”  Chopra also announced that later this month, the CFPB will propose rules to create more competition in banking to make switching financial institutions for better rates and less junk fees, more accessible.

The CFPB additionally issued the results of its recent oversight inspections of major financial institutions, which resulted in financial institutions refunding $140 million in junk fees, $120 million of which were for “surprise overdraft fees and double-dipping on non-sufficient funds fees.”