The CFE Fund recently submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to a Request for Comment on the CFPB’s proposal to update regulations that govern overdraft lending services. Citing evidence from the CFE Fund’s national Bank On initiative, the letter notes the role that overdraft fees play in breeding mistrust and destabilization, and points out the robust market of over 450 Bank On certified accounts across the country that do not allow overdraft, demonstrating the value of transparency and affordability in banking. This comment letter stresses the value of connecting safe and affordable credit options to basic transaction accounts like those certified through the Bank On National Account Standards, such as with overdraft lines of credit. It is critical that the un- and underbanked, a population overrepresented by people of color, can access transparent and safe short-term credit.
Category: Letter
CFE Fund Comment Letter to Treasury on Financial Inclusion Strategy
The CFE Fund recently submitted a comment letter to the U.S. Department of Treasury Office of Consumer Policy in response to a Request for Information on developing a national strategy for financial inclusion. The letter cites evidence from the CFE Fund’s network of Financial Empowerment Center (FEC) municipal partners that demonstrates that access to mainstream banking accounts plays a pivotal role in people’s ability to save money, improve their credit scores, and build strong financial futures. The CFE Fund’s national Bank On movement has also highlighted the unique power of integrating banking access strategies into government service streams to address common access barriers like identification, language, and fees. In this letter, the CFE Fund urged Treasury to focus on large-scale government program and payment opportunities to connect unbanked Americans to mainstream banking, outlining a range of promising “bankable moments” related to federal programs.
CFE Fund Comment Letter on HUD Eviction Proposal
The CFE Fund recently submitted a comment letter to the U.S. Department of Housing and Urban Development in support of the proposal to provide tenants residing in public housing or receiving housing assistance with at least 30 days‘ notice before initiating formal eviction proceedings. The letter cites the success of a recent CFE Fund pilot focused on eviction prevention, which explored how Financial Empowerment Center (FEC) public counseling services could integrate and support existing emergency rental assistance and eviction prevention efforts. The pilot demonstrated that the period between notice of eviction and formal eviction proceedings is crucial to productive service coordination that benefits both tenants and landlords. The CFE Fund noted that our experience shows that additional time and space to coordinate comprehensive services such as rental assistance, legal aid, housing and financial counseling increases the likelihood that clients will seek them out and achieve positive outcomes and reduce the risk of eviction. Read the full letter here.
CFE Fund Comment Letter on Federal Reserve Proposal to Update Maximum Interchange Fees
The CFE Fund recently submitted a comment letter to the Board of Governors of the Federal Reserve System regarding their proposal to update the maximum interchange fees that can be charged by covered debit card issuers. The letter notes the CFE Fund’s learnings from our national Bank On initiative, which partners with financial institutions, community organizations, government leaders, and banking regulators to create pathways for un- and underbanked individuals to enter or reenter the financial mainstream with safe banking accounts; Bank On certified accounts have played a key role in programmatic banking access connections from local summer youth jobs programs to the U.S. government’s emergency pandemic relief funds. The fee limitations and features designated under the Bank On Standards were designed not just to meet consumer need but to be economically sustainable for financial institutions. The CFE Fund noted that our experience shows that interchange fees are a key part of that market sustainability. Read the full comment letter here.
CFE Fund Comment Letter on Statements on FDIC Advertising Rules
The CFE Fund recently submitted a comment letter to the Federal Deposit Insurance Corporation (FDIC) on the proposed changes to the rules governing the use of their official sign and statements about deposit insurance. The letter supports FDIC’s overall approach to ensuring that consumers understand when they are engaging a regulated financial institution and how the deposits are protected, and offers suggestions for effective implementation including a coordinated consumer awareness campaign and a robust compliance and enforcement strategy.
CFE Fund Comment Letter on Community Development Financial Institution Revisions
The CFE Fund recently submitted a comment letter to the U.S. Department of Treasury on the proposed revisions to the Community Development Financial Institution (CDFI) certification application. The letter is specifically supportive of the inclusion of an expanded question evaluating a financial institution applicant’s checking or share account features and its use of Bank On National Account Standards as a guide. It’s a clear recognition of the impact of the Bank On national movement and the critical importance of safe and affordable banking options to meeting the broader mission of the CDFI program.
CFE Fund Comment Letter on Community Reinvestment Act Reform
The CFE Fund recently submitted a comment letter to the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) on their proposal to amend the regulations implementing the Community Reinvestment Act (CRA).
Citing experiences from the Bank On movement, as well as the FEC Public initiative, the CFE Fund supported the proposal for a new Retail Services and Products Test that would evaluate a bank’s branch availability, delivery systems, and the responsiveness of their products to the needs of low- and moderate-income communities; the CFE Fund also supported the highlighting of the Bank On National Account Standards as an example of a responsive deposit product. The CFE Fund suggested that the new Retail Services and Products Test 1) evaluates all large banks for the responsiveness of their deposit products; 2) enables “intermediate” sized banks to elect the Retail Services and Product Test; and 3) looks to the Federal Reserve Bank of St. Louis’ Bank On National Data Hub as an example of key metrics that examiners might use to assess financial institution account engagement.
Finally, the CFE Fund supported the agencies’ proposal to create a separate definition for activities that help individuals and families make informed decisions about managing income, savings, credit, and expenses that is distinct from other community development services, and suggested highlighting activities that produce measurable impacts such as banking access, credit score improvement, debt reduction, and savings increases.
CFE Fund Comment Letter on Community Reinvestment Act Modernization
The CFE Fund recently submitted a comment letter to the Federal Reserve Board on Community Reinvestment Act (CRA) modernization. Citing experiences from the Bank On movement, as well as the FECPublic initiative, the CFE Fund recommended that the CRA examination process should credit financial institutions’ provision of safe and affordable banking accounts and support for meaningful financial inclusion efforts.
CFE Comment Letter to the FDIC on Reform of the Community Reinvestment Act
The CFE Fund submitted a comment letter to the Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency in response to their request for comment on the proposed reform of the Community Reinvestment Act (CRA). The letter expresses the CFE Fund’s concern that a change to the CRA evaluation methodology that focuses purely on quantifiable CRA activities may undermine support for broader financial inclusion efforts that are more difficult to value, such as increasing access to safe and affordable banking accounts and investments in account opening partnerships.
CFE Fund Comment Letter to CFPB on Overdraft Rule
The CFE Fund submitted this 2019 comment letter to the Consumer Financial Protection Bureau (CFPB) in response to the Bureau’s request for feedback on review of the Overdraft Rule. Based on its programmatic experience working with over 80 municipal governments and community organizations across the country, the CFE Fund urged the CFPB not to change the Overdraft Rule. Overdraft fees push millions of consumers outside of the financial mainstream, and serves as a barrier for the previously unbanked to rejoin the system – joining the financial mainstream is a critical component of financial stability. In addition, the market is already moving in a positive direction towards no-overdraft products; changing the Overdraft Rule risks slowing the success of this positive shift.