CU Trades & Other Groups Argue Against CFPB's 'Junk Fees' Study

In a five-page letter to the White House’s Office of Information and Regulatory Affairs (OIRA), NAFCU, CUNA and three other organizations raised concerns that the CFPB’s “Junk Fee Timing Study” is being used to collect data in its effort to restrict “junk fees.” The study does not meet the public comment obligations under the Paperwork Reduction Act (PRA) and should not receive a general clearance, the group argued.

The letter, also signed by the American Bankers Association, Consumer Bankers Association and the U.S. Chamber of Commerce, stated the CFPB’s study “must obtain approval by OIRA under the PRA, which requires agencies to provide two opportunities to comment on a collection request.” A move, the organizations argue, the bureau has not done.

“The Timing Study does not fall within the limited uses that OIRA has defined for a generic clearance,” the letter stated. “The Timing Study is not a customer satisfaction survey, focus group test or website usability survey, and the specifics of this collection can be determined before the data are to be collected. Instead, the Bureau appears intent on using the Timing Study to conduct research to inform the Bureau’s rulemakings or other policy actions.”

The organizations also asked the OIRA to explicitly prohibit the CFPB from using the results of the study to help inform any rulemaking or policy changes or actions.

“Putting aside questions about the legitimacy of the generic clearance process, we urge OIRA to enforce the limitations on use of the streamlined process and disapprove requests for collections that relate to substantive or policy issues,” the letter read. “The failure to enforce these limitations invites agencies to ‘push the envelope’ and seek to use a generic clearance for a survey that is neither low burden nor non-substantive. To maximize the utility of the information collected — a central purpose of the PRA — OIRA must insist that an information collection relating to a substantive or policy issue is conducted through the standard clearance process, which provides the public with two opportunities to comment on, and thus strengthen, the collection.”

NAFCU and CUNA have both previously stated objections to the CFPB’s and President Joe Biden’s use of the term “junk fees” as it lumps in practices used by some banks and payday lenders with credit unions.