IBA Comment on FTC Proposed “Junk Fees” Rule
February 7, 2024
Federal Trade Commission
Office of the Secretary
600 Pennsylvania Avenue NW
Washington, DC 20580
Unfair or Deceptive Fees, NPRM, R207011
Attn: Janice Kopec, Division of Advertising Practices, Bureau of Consumer Protection
Re: Proposed Regulations on Unfair or Deceptive Fees, NPRM, R207011
To Whom It May Concern:
Thank you for the opportunity to present comments on behalf of our 120 commercial, cooperative, and savings banks, as well as federal savings banks and savings and loan associations, which employ more than 72,000 employees throughout Idaho. We believe that the proposed regulations on Unfair or Deceptive Fees, NPRM, R207011, as proposed by the Federal Trade Commission, will impose unnecessary requirements on the Idaho banking industry. We respectfully request that if any regulations are promulgated, they be done in coordination and consultation with the prudential banking regulatory agencies.
The banking industry is among the most regulated in the United States, adhering to strict protocols mandated by both state and federal laws and regulations. Our FDIC-insured banks, subject to oversight by various state and federal regulators, including the state bank regulators, the FDIC, the Federal Reserve, the Office of the Comptroller of Currency, and the Consumer Financial Protection Bureau, rigorously follow rules and directives concerning the protection of customers’ personal and confidential information, financial health, and the full disclosure of fees for various services.
Our industry rejects the notion of “junk, hidden, and bogus fees” as every fee charged by a bank is regulated by numerous statutes and regulations, including but not limited to the Truth in Lending Act, Truth in Savings Act, Consumer Financial Protection Act of 2010, among others.
According to a 2023 Morning Consult survey conducted for the American Bankers Association, 84% of consumers reported being “very satisfied” or “satisfied” with their bank, with 94% rating their bank’s customer service as “excellent,” “very good,” or “good.” Additionally, 78% believe their bank is transparent in disclosing fees. The survey also indicated that 61% of respondents felt that now is not the time for additional regulations on the banking industry due to current economic challenges facing the country.
Furthermore, the survey highlighted strong consumer appreciation for bank overdraft programs, with 88% finding them valuable and 77% who paid an overdraft fee in the past year preferring their bank to cover their overdraft payment. Sixty-three percent of consumers consider it reasonable for banks to charge a fee for an overdraft.
There are several other federal agencies, including the Federal Reserve, the FDIC, the OCC, the CFPB, and the SEC, with various proposed regulations targeting the financial services industry. Many of these proposals seem to overlook the existing laws and regulations that mandate clear and conspicuous disclosure of fees to consumers. The current draft of this proposed regulation misrepresents fee applications and disclosure practices.
The banking industry, bound by state and federal laws, ensures that fees are clearly and conspicuously disclosed, allowing customers to understand the services they pay for. This level of consumer protection should serve as a model for other industries. We support efforts to raise standards for non-banks while avoiding unintended consequences that could overburden an already highly-regulated industry.
We strongly recommend that any proposals to change existing regulation related to the banking industry be undertaken carefully and in coordination with the aforementioned agencies to avoid conflicts and ensure maximum protection for consumers.
We appreciate the opportunity to provide our comments regarding the proposed regulations on Unfair or Deceptive Fees, NPRM, R207011, as proposed by the Federal Trade Commission.
Sincerely,
Trent Wright
Idaho Bankers Association