MBA Letter to CFPB on Fees for Instantaneously Declined Transactions
The Mortgage Bankers Association (MBA) appreciates the opportunity to comment on this rulemaking from the Consumer Financial Protection Bureau (the Bureau or CFPB). The proposed rule would prohibit a financial institution from charging a nonsufficient funds (NSF) fee to a consumer who attempts to withdraw, debit, pay, or transfer funds from their account and is declined instantaneously or near instantaneously by the financial institution. The Bureau interprets the fee to be banned as abusive practice under their unfair, deceptive, or abusive acts or practices (UDAAP) authority. MBA recognizes that the proposed rule would have no effect on the mortgage industry. However, MBA objects to the Bureau’s overbroad interpretation of the scope of its abusiveness authority. The Bureau’s expansive view of its UDAAP authority inappropriately diminishes the role of disclosures in consumer finance.