Tell CFPB Your Thoughts on NSF Fee Proposal

The Consumer Financial Protection Bureau is proposing to prohibit covered financial institutions from charging fees, such as nonsufficient funds fees, when consumers initiate payment transactions that are instantaneously declined. Under the proposal, charging such fees would constitute an abusive practice under the Consumer Financial Protection Act's prohibition on unfair, deceptive, or abusive acts or practices.

CFPB needs to hear from you! At this point, almost all comments submitted have been written by consumers in support of the proposal, so it is important that credit unions weigh in.

The Details

Due Date: Comments are due to CFPB by March 25, 2024.

How: You may submit comments identified by Docket No. CFPB–2024–0003 or RIN 3170–AB16 via any of the following methods:

• Federal eRulemaking Portal: https://www.regulations.gov. Follow the instructions for submitting comments. A brief summary of this document will be available at https://www.regulations.gov/​docket/​CFPB-2024-0003.
• Email: 2024-NPRM-NSF@cfpb.gov. In the subject line of the message, include Docket No. CFPB–2024–0003 or RIN 3170–AB16.
• Mail/Hand Delivery/Courier: Comment Intake—2024 NPRM Fees for Instantaneously Declined Transactions, c/o Legal Division Docket Manager, Consumer Financial Protection Bureau, 1700 G Street NW, Washington, DC 20552.

All submissions should include the agency name and docket number or Regulatory Information Number (RIN) for this rulemaking. In general, all comments received will be posted without change to https://www.regulations.gov.

**** Copy Suzanne Yashewski:
Be sure to copy Suzanne Yashewski, regulatory compliance counsel, at syashewski@cornerstoneleague.coop. 

Read Other Comments Submitted:
https://www.regulations.gov/docket/CFPB-2024-0003/comments

CFPB Proposal: The proposal itself can be found here.

Overview: The proposed rule would prohibit NSF fees on transactions that are declined instantaneously or near-instantaneously—that is, those declined with no significant perceptible delay after the consumer initiates the transaction. This prohibition would cover transactions involving the use of debit cards, ATMs, or certain person-to-person apps. The proposed rule would declare that charging such fees would constitute an abusive practice under the Consumer Financial Protection Act.

The proposed rule, borrowing the term “covered financial institutions” as defined by Regulation E, would cover financial institutions of any size and depositories as well as non-depositories.

Suggested Talking Points

• Start out by introducing your credit union, your membership/FOM, and how you serve your community including training about financial education.
• Oppose the proposal and let CFPB know this proposed rule is not needed. 
• In the proposal, CFPB admits that these fees rarely occur, and it also admits that the banking industry has already decreased and/or eliminated many fees.  
• Urge CFPB against overregulation and against deeming such fees as abusive.
• Explain that credit union fees are appropriately disclosed and that consumers have the ability to avoid most fees by properly managing their accounts.
• CFPB claims these fees are not tied to any service provided by a financial institution. Remind CFPB of the importance of payments systems to both consumers and merchants. Explain that a debit card program is a service that bears high costs to the financial institution including significant operational and financial costs associated with staffing, operations, technology, cards, compliance, fraud, and more.
• Explain how a financial institution verifies funds availability at the point of sale for the benefit of both the merchant and consumer.
• Explain that the CFPB dictating specific service level fees will impact any financial institution’s ability to safely provide such services.
• Explain how the proposal would negatively impact your credit union, and more importantly, how the proposal will negatively impact your members (the consumers) due to unintended consequences.

Questions? Contact Suzanne Yashewski, regulatory compliance counsel, Cornerstone League at syashewski@cornerstoneleague.coop.