1. On Wednesday October 8, 2014, the Consumer Finance Protection Bureau (CFPB) announced its interest in exploring the manner in which consumers applying to open checking accounts are approved and, more critically, refused a checking account based on information in reports of consumer reporting agencies that focus on transaction accounts. These reports, and the related screening processes of banks and credit unions, can greatly affect how consumers are treated, which is why the CFPB is interested.
The Bureau has three areas of concern:
First, they are concerned about the accuracy of the information in these reports. Second, they are concerned about people’s ability to access these reports and dispute any incorrect information they may find.
Third, they are concerned about the ways in which these reports are being used.
This may be a good time to have our seasoned, former, Federal, bank regulators check your deposit account opening procedures to ensure that you are complying with the Fair Credit Reporting Act and treating consumers applying for checking account fairly in the process.
2. The CFPB ordered a New York bank to refund $2.9 million to 59,000 checking account customers. The Bureau argued that the bank deceptively collected fees from accounts that had been billed as free checking.
The CFPB said that the bank inadequately disclosed the terms required to maintain a “no-fee” account status, such as minimum activity levels or a minimum monthly balance. When accounts had not been active for 90 days, the Bureau said, the bank charged monthly fees ranging from $5 to $14.
The Bureau cited advertisements that included the phrases “no strings attached”, “free yourself from monthly service fees” and “totally free checking” without mentioning a required minimum activity level. The bank, which did not admit wrongdoing, will also pay a $200,000 fine to the CFPB.
Let our former, Federal regulators review your advertising to make sure it is clear and conspicuous and free of any unfair or deceptive language.
