CFPB Issues Advisory Opinion on Consumer Information Requests to Large Banks, Credit Unions

Today the CPFB issued an advisory opinion regarding Section 1034(c) of the Consumer Financial Protection Act (CFPA), which requires large banks and credit unions to comply with consumer requests for information about their account. These requests can include balance inquiries, information about recent transactions, loan balances, interest rates, recent bill payments, fee schedules, lien statuses and more.

An important note up front: 1034(c) applies only to banks and credit unions with $10 billion or more in total assets. This is why the Advisory Opinion repeatedly refers to "large banks and credit unions." The vast majority of credit unions, both nationally and here in Virginia, are under this asset cap, so would not be directly impacted by this opinion. However, we've seen how opinions and actions from the CFPB can influence practices and trends across the industry, so this is something for financial institutions of all sizes to be aware of.

Banks and credit unions can impose reasonable conditions on these requests, like verifying someone’s identity or asking for more specific information about their request. However, they cannot impose unreasonable conditions on the consumer making a request and still comply with 1034(c).

The advisory opinion states that, in general, charging a fee is an unreasonable condition, and thus would violate 1034(c). This includes charging fees for inquiries about deposit account balances, loan balances, requests for supporting documents, or for research time spent on consumer inquiries. There are limited circumstances where a fee could be charged, like if someone repeatedly requests the same statement or check copy.

Depending on circumstances, long wait times on the phone could also be considered an unreasonable condition, as could requiring consumers to interact with chatbots that do not understand or adequately respond to consumers' requests. Information delivered must also be timely, which can vary based on circumstances, and accurate.

In general, large credit unions charging a fee in these situations would violate 1034c:

• A member comes into a branch and requests a copy of a check.
• A member calls into the call center and asks for their checking account balance.
• A member requests copies of their last six monthly statements.
• A member calls the lending department to inquire about the status of a mortgage lien on their home.
• A member asks for transaction information on any payments to a certain vendor in the last 3 years.
• A member asks for information about the account that requires 2 hours of research from a staff member.

In general, large credit unions could still charge fees in these situations:

• A member requests a copy of a certain check they have requested three times before, but they keep losing.
• An attorney's office requests 7 years worth of account statements via a subpoena duces tecum (1034(c) only applies to requests by consumers, not third parties).
• A member requests a stop payment on a check.
• A member initiates a wire transfer.

Finally, the Advisory Opinion clarifies that a consumer does not have to reference section 1034(c) for a request or inquiry to be considered a 1034(c) request for information.

The CFPB continues its battle against junk fees. This opinion's release today coincided with proposed rulemaking from the FTC requiring businesses to display "all-in pricing," showing the amount of all fees, their purpose, and whether they are refundable. President Biden gave remarks today praising these efforts by the CFPB and the FTC and calling on Congress to pass the Junk Fee Prevention Act.