CU and bank groups: CFPB has no authority over ‘relationship banking’

by David Baumann, CUCollaborate

The CFPB does not have the authority to define and regulate “relationship banking” at financial institutions, credit union and banking trade groups told the agency this week.

“Nowhere in the [request for information] does the Bureau clarify its legal basis for extending a provision related to the ability to obtain information to scrutinizing the quality of customer service financial institutions provide to consumers broadly,” said Lisa Althoff-Simmons, interim CEO at the Heartland Credit Union Association, which represents credit unions in Kansas and Missouri.

In June, the CFPB relied on Section 1034(c) of the Dodd-Frank Act to seek information about customer service at financial institutions with more than $10 billion. However, bureau officials have since indicated they are interested in customer service and relationship banking in general.

CUNA, NAFCU, the Heartland association, and a coalition of banking groups are crying foul and contending that the request for information appears to be the first step in a CFPB move to regulate customer service.

 

continue reading »