Regulators’ focus on eliminating so-called “junk fees” could deprive consumers of much-needed financial services, including access to affordable credit, according to a Tuesday panel discussion.
The CFPB’s focus on fees is almost entirely political, panelists said.
Participating in the discussion were Jim Hunsanger, chief risk officer at Michigan State University Federal Credit Union; Leah Dempsey, shareholder and financial services practice chair at Brownstein Hyatt Farber Schreck; John Coleman, partner at Orrick; America’s Credit Unions’ James Akin; and the session’s moderator.
Financial institution service charges are under attack from multiple directions, panelists said. The latest salvo, issued Tuesday, is CFPB’s final rule cutting typical credit card late fees from $32 to $8.
The agency’s actions may put consumers at risk, Hunsanger said.
“We try to be as transparent with our members as possible,” he said, citing overdraft protection as an example. “The vast majority of consumers use this to avoid using riskier providers such as payday lenders. This could limit their ability to manage their financial lives. We need to make these programs sustainable for the long term.”
Panelists also addressed how credit unions use fees to support member services, the prognosis for future limitations on fees, and how credit unions, leagues, and America’s Credit Unions are pushing back.
Advocacy team highlights 2024 regulatory challenges
Members of America’s Credit Unions’ compliance team examined what regulatory challenges credit unions will be facing in 2024, mostly stemming from policies from the NCUA and CFPB.
NCUA examiners will focus on three kinds of risk, according to the agency’s 2024 supervisory priorities: credit, liquidity, and interest rate risk.
NCUA has also expanded its focus on consumer protection, and fair lending. Panelists also discussed NCUA’s upcoming changes to the call report, scheduled to begin March 31.
“If you have issues, bring them up to NCUA, also let us at America’s Credit Unions know. When we hear that our members are dealing with a particular issue our advocacy team will bring it up with the agency during our meetings, it might be something we can talk to them about or even push for some changes,” said America’s Credit Unions’ Nick St. John.
Staff also discussed the CFPB’s areas of focus, including the future of the small business lending data collection rule under section 1071 of Dodd-Frank in the wake of the credit union-led court decision staying implementation, as well as appraisals and overdraft rulemakings.
Political strategists on what to expect in the 2024 election
Political strategists Keith Frederick, a Democrat and the owner of FrederickPolls, LLC, and Brock McCleary, a Republican and vice president of polling at Cygnal, stopped by GAC on Super Tuesday for a breakout session on what to expect in the upcoming election.
They expect the ballot to look the same as 2020, with President Joe Biden and former President Donald Trump opposing each other. Frederick believes that will be the case no matter what happens with Trump’s trials.
Among the issues the strategists see impacting the White House, House, and Senate races include foreign policy, immigration, and the economy.
Panelists detail the latest in litigation
A panel featuring Brandy Bruyere, Honigman LLP, Cristina Miller, SW&M LLP, and Christopher Pippett, Fox Rothschild LLP, moderated by America’s Credit Unions’ Alexander Monterrubio tackled the latest litigation hot topics.
The group outlined several items for credit unions to watch closely, including:
- Regulatory action related to “junk fees”;
- Litigation related to Regulation E and the Electronic Fund Transfer Act (EFTA);
- Data breaches; and
- Fair lending.
Use #GAC2024 on social media to engage with America’s Credit Unions and industry advocates throughout the 2024 Governmental Affairs Conference.
