WASHINGTON—The CFPB’s recent overdraft circular imposes new requirements in violation of statute and should be rescinded, America’s Credit Unions and other financial services trade organizations wrote to CFPB Director Rohit Chopra.
The CFPB issued its circular in September. As CUToday.info reported, others have raised concerns about the circular.
“Through the circular, the Bureau is attempting to establish new expectations, effectively changing existing law,” the letter reads. “The Bureau’s new interpretation of Regulation E removes institutions’ flexibility in recording and retaining customer’s opt-ins…by imposing ‘new obligations on regulated parties,’ the circular is a legislative rule, which should have gone through notice-and-comment rulemaking.”
The organizations, which include the Independent Community Bankers of America and the American Banker’s Association, contend the CFPB and other agencies should propose the new expectation, seek feedback (including on costs and implementation challenges), then finalize it, rather than simply announcing new expectations.
The letter was also copied to the NCUA, Federal Reserve and Office of the Comptroller of the Currency.