Consumer Financial Protection Bureau’s Post

There are extremely easy requirements that a bank can mandate for employees to get credit for any account they open. Examples: all deposit accounts must have money deposited in them online banking - customer must log in at home debit card - must be used to make a purchase. If the account is closed within 6 months of being opened, the employee loses credit for the account. Bank of America added those requirements 10 years ago or so to ensure employee were not opening fake accounts. The bank loses money if the account is never used. There is no reason banks are not implementing these requirements to prevent this type of fraud.

Another day, another misbehaving bank. Meanwhile, large banks have the nerve to threaten raising costs to consumers for currently “free” products and services to comply with proposed regulations. Clearly, regulation is necessary since we can’t go a week without announcements like these. Good products and services will only be delivered to consumers left out of the financial system when they’re coupled with good regulations remedying past harm and building an equitable economic future.

Take aways: Make sure customer facing employees are well trained in how products and services work at your institution. Overdraft services can be tricky to understand - especially for employees new to banking. (Which transactions fall under an opt in) Make sure your account opening procedures (process) are in the right order! In this case customers were given all the right disclosures- but not in the right order! Process matters!

Please see the latest in Money Laundering Watch by John Socknat and Kaley Schafer regarding the pronouncement by South Dakota that certain licensees are covered by the BSA. Read the post and decide for yourself. https://lnkd.in/ehySwWv7

Last week, the CFPB took action against Atlantic Union Bank for illegally enrolling thousands of customers in checking account overdraft programs. The CFPB found that Atlantic Union misled consumers who enrolled in this overdraft service by phone and failed to provide proper disclosures. The CFPB’s order describes the bank’s illegal conduct and how it improperly communicated with and enrolled consumers in its overdraft program. Specifically, the bank violated federal law by: Charging fees without proper consent: Employees sought oral confirmation from customers to enroll in overdraft coverage before providing them with the required written disclosures describing the terms of service. Misleading customers about the terms and costs of overdraft coverage: Bank employees did not clearly explain to customers enrolling over the phone which transactions were covered by the service, and made other misleading statements about the terms and conditions of the service. Enforcement Action The CFPB found Atlantic Union Bank violated the Electronic Fund Transfer Act’s opt-in requirements for overdraft services, and it found the bank engaged in deceptive acts or practices in violation of the CFPA. Atlantic Union must refund at least $5 million in illegal overdraft fees and pay a $1.2 million penalty to the CFPB’s victims relief fund. If you have any questions about this enforcement order or want to discuss your credit union's operations, please reach out to our office. #creditunions #compliance #CFPB #overdraft

There are bank product professionals who should have awareness of this regulatory/legal concerns. But because of circumstances in the management of bank product fees, banks do price returned deposited check fee for both consumers and business customers. Product professionals should always be managing fee schedules proactively and proposing changes as necessary. Bank executives should fund their staff budgets for product management professionals to mange the bank’s products and insure the bank remains compliant at all times, and avoid regulatory penalties and reputational risks. #banks #regulatorycompliance #productmanagement

Financial Conduct Authority warns consumers against loan fee fraudsters amid rising summer borrowing The #UK’s #financial #watchdog has issued new #advice to consumers to help them spot and avoid loan fee fraud, as it continues to #pioneer initiatives that put the #consumer’s #interests front and centre. https://lnkd.in/dGVPgzvd #fca #aml #riskmanagement #paytech #regtech

Have you ever wanted to read about the Consumer Financial Protection Bureau's new rule on the mandatory registry for non-bank service providers? If so, Attorney Steve Lovejoy wrote an article about the new rule and the effect it may have. Click the link below to learn more about the registry and if your company may have a reporting obligation. https://lnkd.in/eBASHzK2

The Conference of State Bank Supervisors (CSBS) criticism here is spot-on. It’s one thing when the US Congress ignores its legislative duty and makes it easy for #federalbankingagencies to over-interpret and thus de facto play lawmaker—which has happened many times in the past several decades . It’s another thing when for the last 15 years the Office of the Comptroller of the Currency (#OCC) has ignored, as Matthew Lambert has pointed out, a deliberate process set up by Congress in the Dodd-Frank Act for national bank #preemption decisions to be made by the #OCC on a case-by-case basis (albeit, appealable, of course). So, even in the rare case—Dodd-Frank—that Congress arguably acted responsibly in matters related to #federalism and #bankingregulation, its mandate was ignored. This rare case, by the way, was clearly designed to also curtail the unbridled application of #chevrondeference to #federalagency interpretation of Congressional intent as to the national bank preemption from state laws. To no avail. That’s why those of us who believe in #federalism and lean toward states being able to enforce their consumer protection laws against all banks (state- and federal-chartered) are so eager to see the Supreme Court of the U.S. overturn Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. (1984). Not to mention wanting to assure an equal playing field as between federal- and state-chartered banks. #banking #bankingandfinance #communitybanking

Another informative story on how to ensure your money is INsured! Chart shows the wide variety of bank customer segments who can benefit, but don’t miss the story explaining how all this works.