Florida Banking July 2022

ELECTIONS MATTER: THE DIFFICULT CASE OF THE CONSUMER FINANCIAL PROTECTION BUREAU STRAIGHT TALK FROM THE PRESIDENT’S DESK

BY ALEJANDRO “ALEX” SANCHEZ, FBA PRESIDENT AND CHIEF EXECUTIVE OFFICER

W hich federal government agency in our nation’s capital wins the award for being most politically motivated? The Consumer Financial Protection Bureau (CFPB) wins that prize. The CFPB was effectively on hiatus from January 2017 until January 2021, when the agency returned in full force under the leadership of President Biden and his named CFPB Director Rohit Chopra. How can this be? Well, the moral of this story is that elections matter. You can’t vote for candidates that don’t like our industry and believe that everything will come

experiences at so many parts of their financial life.” Those words by Director Chopra were a mistake and never should have been stated. The CFPB’s continuing odyssey with stopping NSF fees is also out of control, as time after time it has been shown that overdraft protection is one of the most asked-for services by bank customers. (A recent ABA/Morning Consult survey revealed that nine in 10 consumers find their bank’s overdraft protection valuable, and well over half believe it is reasonable for banks to charge a fee for the service.) But I must also say that on our Zoom call with

up roses. Neither life nor elections work that way. That is why I always tell people that I am a “one trick pony” when I vote; I support candidates who will support our industry. That is the question I answer when deciding who to vote for. The CFPB will cause increasing regulatory burden for our industry and especially for community banks. Why does this matter? As the number of community banks in our country diminishes, it is vitally important to know

Director Chopra earlier this year, we urged him to go after the “shadow banking industry.” A few days after our call with Director Chopra, the CFPB said it would invoke a “largely unused” authority under the Dodd-Frank Act to directly examine nonbank financial services providers. “Given the rapid growth of consumer offerings by nonbanks, the CFPB is now utilizing a dormant authority to hold nonbanks to the same standards that banks are held

“BUT THE BOTTOM LINE IS THAT WE MUST ENGAGE ALL POLICYMAKERS, BOTH THOSE WE AGREE WITH AND THOSE WE DON’T.”

which of the agencies are increasing the regulatory costs for our community and regional banks. The CFPB is one of those agencies. During a recent House Financial Services Committee hearing, Republican lawmakers asked CFPB Director Chopra to define what he meant by “junk fees” — a term coined by the bureau as part of a media campaign — but Director Chopra would not offer any formal definition. When asked by Rep. Andy Barr (R-KY) if he could offer “any legal or statutory authority that defines ‘junk fees,’” Chopra replied: “No. Junk fees are something that everyone

to,” said Director Chopra. “This authority gives us critical agility to move as quickly as the market, allowing us to conduct examinations of financial companies posing risks to consumers and stop harm before it spreads.” Was that decision by Director Chopra a coincidence? Did the FBA play a role in making that happen? There is a long line of those who will take credit for this action and let them do so. But the bottom line is that we must engage all policymakers, both those we agree with and those we don’t, which is why the FBA scheduled a meeting with Director Chopra.

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