ABA yesterday said that the Consumer Financial Protection Bureau’s expansive authority to gather information under Section 1022 of the Dodd-Frank Act must be changed. To inform its rulemaking process on overdraft protection services, the CFPB ordered three large core processing providers -- Fiserv, FIS and Jack Henry -- to turn over anonymized information about the overdraft services they provide for depository institutions.
In a memo to state associations, ABA said it is important that the CFPB conduct a full study of the market for overdraft services that includes the overdraft programs of community financial institutions, in contrast with the programs of a few large banks the bureau first began studying several years ago.
However, ABA emphasized that the bureau should fully cover the cost of its information-gathering activities. Fiserv has estimated that complying with the bureau’s order will consume “thousands” of staff hours, and has alerted its depository institution clients that it may have to pass the costs of responding on to these institutions.
ABA added that it would seek a legislative solution to the bureau’s expansive powers under Section 1022, which allows the CFPB “to demand whatever information it wants, from any industry participant, with little or no consideration for the cost of producing that information or for the impact the demand will have on other entities.” The CFPB should have to fund its information-gathering activities and provide due process protections, ABA said.
Read ABA's memo.
For more information, please contact ABIA's Sarah Ferman.