CFPB Official Hints at Disclosure Requirements for Checking Accounts

By: David L. Beam

Raj Date recently issued a statement on the CFPB’s web site which suggests that the Bureau is considering a standardized disclosure form for checking account fees. The “problem,” Mr. Date said, “is that checking accounts often come with a wide variety of unexpected costs that can quickly add up for consumers.” One bank might call the fee one thing, while another bank calls it something else. And the circumstances under which banks charge the same fee might be different.Mr. Date then noted that “CFPB has the ability to simplify checking account disclosures.” He said that this would be “good for competition” because it would allow “consumers to compare the checking account options from large banks, community banks, and credit unions and pick the one that works best for them.”

This is a far cry from a warning that the Bureau will soon be issuing new checking account disclosure rules. But it does show that the Bureau is considering the possibility. Moreover, Mr. Date’s comments seem to suggest a TILA-style disclosure regime, where each bank’s fee schedules are transmuted into a standardized statement of the cost (think the “finance charge” under TILA) that will allow consumers to make “apples to apples” comparisons of costs for different checking accounts.

A checking account disclosure regime inspired by TILA has the potential to be extremely complicated and burdensome to implement. Fortunately, it appears that the idea is still in its infancy, which means that the industry has time to shape it.