CBA’s Johnson Discusses Section 1033, Combatting Fraud, and Working with the Incoming Trump Administration on “Banking With Interest” Podcast
ROSSLYN, Va. – Consumer Bankers Association (CBA) President and CEO Lindsey Johnson sat down with former journalist, IntraFi Chief Content Officer, and host of the popular banking podcast “Banking with Interest” Rob Blackwell to discuss recent and anticipated regulations coming from the Biden Administration’s Consumer Financial Protection Bureau (CFPB), as well as how she anticipates industry can work with the incoming Trump Administration to advocate for sound financial regulatory policy that benefits all consumers.
Read excerpts from the interview below and listen to the entire “Banking with Interest” episode HERE.
On the Industry’s Concerns the CFPB’s Open Banking Rule Will Increase Fraud and the Need for a Whole-of-Government Approach to Combat Fraud
“[Section 1033] will make fraud worse – 100 percent. The third parties that we're talking about plugging in and actually accessing these consumers’ data do not have the same data security and consumer protection standards banks adhere to […] If that third party somehow discloses information, improperly uses it […] That is going to be a huge fraud vector for all kinds of fraud to occur.”
“We have real concerns about the dramatic increase in first party fraud […]Those have significant costs. And so it is incumbent upon banks to do what we can to limit those types of fraud and scams. But it's really incumbent upon this much more whole-of-government approach […] We can start to remove some of the different fraud vectors. We need to pursue criminal prosecution when we find the individuals [guilty of committing these types of fraud].”
Dive Deeper: To read CBA President and CEO Lindsey Johnson’s statement on the CFPB’s final rule to implement Section 1033, click HERE. To read Johnson’s recent op-ed calling for a whole-of-government approach to combat fraud and scams, click HERE.
On How the CFPB’s Forthcoming Overdraft Rule Would Negatively Impact Consumers
“We have huge concerns about [the CFPB’s forthcoming overdraft rule] inhibiting innovation […] And so that is something where we, again, want to take the politics out of the policy […] Not only did they use a decade old data to justify their proposed rule, but there was nothing that really pointed to the potential impact to the consumer [about the need for this rule].”
“We surveyed a number of banks and found that if the CFPB sets a price at any of the prices [it has proposed] – $3, $7, or $14 – 92 percent of those respondents said that they'd have to reduce overdraft liquidity offered to their consumers […] And the severity in terms of the loss of liquidity that they would experience is pretty extreme.”
“You can see just how competitive these different banks have become [in their overdraft services]. From daily limits on the number of overdrafts to extended grace periods, de minimis amounts before an overdraft can be charged up to $50 […] The goal is to give the consumer and empower the consumer with as much information and to really be able to make those decisions themselves, to still allow them to have access to this service and this liquidity even when they don't have money in the bank.”
Dive Deeper: To read more about CBA’s latest survey regarding the effects of the CFPB’s overdraft rule on consumer, click HERE.
On Working With the Incoming Trump Administration
“I think that there is a whole menu of items [that we can work with the Trump Administration on] that are pro-growth, driving the economy, driving the consumer forward […] focused on smart regulation. And that doesn't mean deregulation, that means smart regulation making sure that agencies are justified to the right, doing the right cost benefit analysis of the rules that they're writing. We have not seen that from a number of different agencies […] We definitely haven't seen that on the side of the [Biden] Administration’s CFPB.”
“We are ready to get to a place where we can seek the opportunities that are going to best position our consumers and the small businesses around the country to have access to financing and to really pursue their dreams. We're ready to be at the table, ready to work with the next Administration.”
Dive Deeper: To learn more about “Vision for America – A Bank Policy Agenda for All,” which outlines the retail banking industry’s priorities, beliefs, and positions on financial service policy issues, click HERE.
