At a field hearing in Louisville, Ky., the Consumer Financial Protection Bureau (CFPB) told industry participants that providing ways for unbanked consumers to access the financial system safely and securely was a priority.
“Consumers should not be sidelined out of the basic banking services they need because of the flaws and limitations in a murky system,” CFPB Director Richard Cordray said in a news release. “People deserve to have more options for access to lower-risk deposit accounts that can better fit their needs.”
To do so, the bureau pushed three ways it hopes to increase access:
- First, Cordray sent a letter to CEOs of the top 25 retail banking companies, urging them “to do more to create or promote deposit accounts designed to meet consumers’ financial needs.” Among the recommendations the CFPB mentioned are having banks and credit unions offer “no-overdraft” accounts alongside more common checking account products. In addition, the bureau urged institutions to advertise and promote the availability of such accounts, saying it was “concerned that even when companies have these accounts available, consumers don’t know about them.”
- Second, the CFPB issued a bulletin warning banks and credit unions that they must have systems in place regarding accuracy when they pass on information, such as negative account histories, to checking account reporting or other credit reporting companies. In a news release, the bureau cited its most recent Supervisory Highlights report in saying that examiners “found that one or more financial institutions failed to ‘establish and implement reasonable written policies and procedures regarding the accuracy of the deposit account information provided to the consumer reporting companies.’ ”
- Finally, the CFPB said it was issuing consumer advisories and resources designed to help them obtain a copy of their checking account history, dispute discrepancies with a reporting company or financial institution, and shop around for lower-risk accounts such as “no-overdraft” or prepaid card accounts.
“And so we envision a system that recognizes and responds to consumer needs by providing checking accounts and prepaid accounts that better fit their personal financial circumstances,” Cordray said in prepared remarks at the field hearing. “This is good for consumers. It is good for responsible businesses. And it is good for the economy as a whole.”