Community banks and credit unions have sent a warning to the Consumer Financial Protection Bureau (CFPB), advising against hasty decisions when formulating regulations regarding fees for overdraft and nonsufficient funds. The CFPB is bound by current legislation to assemble a small business interagency review panel prior to finalizing such proposals, given the direct impact these regulations would have on financial institutions with total assets amounting to $850 million or less.
This position was stated clearly in a recent letter addressed to the agency from the American Bankers Association, the Independent Community Bankers of America, and America’s Credit Unions. This requirement stems from the 2010 Dodd-Frank Act, which necessitates the CFPB to carry out a small business review for any rulemaking that bears significant economic impact on a substantial number of small entities.
Therefore, the warning from smaller financial institutions serves as a crucial reminder of the need for thorough review and consultation, to ensure that any new rules imposed are effective, fair, and considerate of these smaller entities and the important role they play in the financial industry. The full details of this development can be found in the original report published on Bloomberg Law.