In October 2023, the CFPB issued an advisory opinion titled, “Consumer Information Requests to Large Banks and Credit Unions.” The upshot of the advisory opinion is that covered financial institutions responding to consumer information requests under Section 1034(c) of the Consumer Financial Protection Act (CFPA) face significant limitations on the fees they can charge to cover the costs of those requests.
Section 1034(c) of the CFPA requires financial institutions to respond to a consumer’s request for information concerning a consumer financial product or service in a timely manner. Covered financial institutions are “insured depository institutions and credit unions that offer or provide consumer financial products or services and that have total assets of more than $10 billion.”
In analyzing Section 1034(c) of the CFPA, the advisory opinion observes that consumer requests for information “concerning” an account encompass a wide variety of information, including balance information, interest rate, detailed transaction information, and the status of a lien. Thus, financial institutions must timely respond to a consumer’s request for any of that information (with supporting written documentation where appropriate), unless the request falls within one of four specific limited exceptions. The four limited exceptions where covered institutions are not required to provide information include where the requested information would contain 1) confidential commercial information; 2) information collected for the purpose of preventing fraud or money laundering or unlawful conduct; 3) confidential information under the law; and 4) non-public or confidential information.
Despite the cost to financial institutions in responding to such broad requests, the CFPB stated that “requiring a consumer to pay a fee or charge to request account information, through whichever channels the bank uses to provide information to consumers, is likely to unreasonably impede consumers’ ability to exercise the right granted by section 1034(c), and thus to violate the provision.” However, the CFPB notes that covered financial institutions may impose a fee in certain limited circumstances, such as where a consumer repeatedly requested and received the same information regarding their account. In the same regard, the CFPB also acknowledged that certain measures, such as identity verification, account verification, and data security measures, would not unreasonably impede a consumers’ ability to obtain information regarding their accounts. Notwithstanding those (minor concessions), the advisory opinion appears to express the CFPB’s significant skepticism that fees charged for routine requests under Section 1034(c) are appropriate.
The CFPB’s advisory opinion on Section 1034(c) – its first issued guidance regarding the statute – is part of the CFPB’s continued focus on fees charged by financial institutions. As an example, on Oct. 11, 2023, the CFPB also released a special edition of its Supervisory Highlights focused specifically on “junk fees,” and detailing over $140 million in fees being refunded to consumers. Further, in June 2022, the CFPB issued another advisory opinion on pay-to-pay fees. Eliminating fees paid by consumers appears to remain an agency priority, and we plan to publish future blogs on which type of fee finds itself in the crosshairs next.