March 21, 2023

Three financial institution commerce teams are taking goal on the Client Monetary Safety Bureau’s latest request for data associated to customer support at giant banks and credit score unions.

In a joint letter to the CFPB on Monday, the American Bankers Affiliation, the Financial institution Coverage Institute and the Client Bankers Affiliation challenged the authorized foundation of the CFPB’s request and accused the company of mischaracterizing the standard of customer support that banks present. The CFPB’s criticisms, which the teams described as unfair, might push customers out of mainstream banking, they argued.

“The CFPB’s statements within the [request] unfairly characterize the standard of customer support offered by banks and seem to mirror the CFPB’s predetermined conclusions that banks don’t present high-quality customer support,” the teams wrote. “This method is unhelpful to customers as they navigate the monetary companies market and is prone to confuse them.”

In response to criticism from three trade teams, a spokesperson for the Client Monetary Safety Bureau mentioned that the company hopes “trade will work constructively with the CFPB to revive actual relationship banking and competitors to the monetary companies sector.”

Joshua Roberts/Bloomberg

In response to the letter, the CFPB identified that it “receives 1000’s of complaints annually from customers about customer support difficulties at banks and credit score unions.”

“We disagree with the assertions outlined within the joint letter and we hope that trade will work constructively with the CFPB to revive actual relationship banking and competitors to the monetary companies sector,” a CFPB spokesperson mentioned Monday afternoon in an e mail.

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The trade suggestions comes greater than two months after the CFPB first sought public enter in regards to the responsiveness of banks and credit score unions with greater than $10 billion of property. In its request, which was revealed on June 14, the CFPB wrote that “many giant monetary establishments are more and more shifting towards algorithmic banking and away from relationship banking,” and described the company’s request for data as “a part of a broader effort to revive relationship banking in an period of consolidation and digitization.”

The patron bureau wished to understand how lengthy a buyer usually waits on maintain to achieve a financial institution’s customer support, how usually calls are dropped or disconnected, if automated programs are useful and the way customer support representatives are evaluated and compensated by banks.

The banking teams argued that the CFPB doesn’t have the authority to control customer support or relationship banking, and that doing so would exceed the CFPB’s official duties as decided by Congress. Additionally they challenged the notion that high-quality relationship banking is barely attainable head to head and never by means of on-line and digital channels.

The trade teams cited an American Bankers Affiliation survey from October 2021, wherein 97% of customers ranked the service they obtained from their financial institution as “glorious,” “excellent” or “good.” Additionally they pointed to an American Bankers Affiliation/Morning Seek the advice of survey in February that confirmed 9 out of 10 Individuals with a checking account reported being “very happy” or “happy” with their main financial institution. 

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“The CFPB is misguided in suggesting that superior customer support could be offered solely by means of dwell interactions with a financial institution consultant,” the teams wrote. “Banks serve prospects the place they’re and on the instances when prospects need to entry banking companies. The multitude of how prospects can entry banking companies and obtain help with these companies is a trademark, not a detriment, of the U.S. banking system.”

The commerce teams additionally hit again on the concept that trade consolidation is undermining customer support. They cited information from the Federal Deposit Insurance coverage Corp. exhibiting the variety of financial institution branches in america elevated by about 40% between 1990 and 2020.

Since 2009, nonetheless, the variety of branches has declined by 12.4%, the identical FDIC information reveals.

Monday was the ultimate day to submit feedback to the CFPB.

The company mentioned the suggestions might be used to develop future coverage steerage and different initiatives associated to customers’ proper to get details about their financial institution accounts.