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AFSA Responds to CFPB RFI on Fees

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Last week, AFSA responded to a Request for Information (RFI) from the Consumer Financial Protection Bureau (CFPB) concerning fees. Before addressing the substance of the issue, the letter takes issue with the Bureau’s investigation of fees in the first place.

“First the Bureau lacks the statutory authority to regulate rates,” Celia Winslow, Senior Vice President at AFSA wrote. “Second there is no need to regulate fees in the consumer credit marketplace because there is already robust competition for consumers’ business and broad consumer choice in the market.”

In response to the RFI itself, that letter notes that while AFSA is a signatory to the joint letter from trade associations primarily regulated at the federal level, many AFSA members are regulated at the state level and thus, AFSA’s comment focuses on four main areas:

  1. State law has long recognized that reasonable fees on the consumer credit market are appropriate;
  2. State and federal disclosure requirements have created a fair and competitive marketplace;
  3. The RFI reflects no consultation with the states, and;
  4. Fees often relate directly to transactions led by consumer behavior.

In fact, 17 state attorneys general also responded to the CFPB’s RFI, stating that they feared the CFPB may view its own authority as superior to that of the states, as evidenced by its failure to acknowledge “the significant role state law plays in many aspects of the fees implicated by the RFI.”

The letter goes on to express that:

  • state law on fees is extensive,
  • state laws are well thought out based on a deep understanding of the economic circumstances of the state, and;
  • that state regulators and attorneys general conduct extensive examinations and enforce their fee laws.

The attorneys general also point out numerous ways that the CFPB’s authority on fees is limited.  The AGs “strongly encourage the CFPB to abandon its apparent determination to adopt an uncooperative posture” on fees and coordinate better with states to better understand the scope and significance of existing state law.

Read the comment letter for AFSA’s full responses.

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