Comments on Proposed Rulemaking on Fees for Instantly Declined Transactions

ICBA submitted comments on a CFPB proposed rule to bar financial institutions from charging fees, such as non-sufficient-funds fees, when consumers initiate payment transactions that are instantaneously declined.

In its comment letter, ICBA said that while community banks do not charge NSF fees for instantly declined transactions, the proposal is an example of the CFPB improperly expanding its UDAAP authority, which has also applied to overdraft rules and determinations of discrimination.

The CFPB should not use its UDAAP authority to curtail practices that it disagrees with when those practices are contractually consented to by the consumer and do not meet the statutory definition of abusive, ICBA said.