Credit Union Trades Contend That’s Their Purpose.
Attempting to foster “relationship banking,” the Consumer Financial Protection Bureau is seeking comments on how responsive the largest credit unions and banks are to complaints from their members and customers.
“We want to hear from bank and credit union customers about their customer service experiences,” CFPB Director Rohit Chopra said in a speech last week in Montana. “We want to know what information would be helpful for consumers to obtain from their banks.”
He added, “Are they able to obtain it in a timely manner? If not, what are the obstacles? Is this preventing them from achieving their banking goals?”
In letters to the CFPB earlier this year, the two national credit union trade groups said that credit unions were created to provide “relationship banking” to their members.
The request for comment on consumer complaints focuses on credit unions and banks with more than $10 billion because in 2010, Congress specifically said that consumers needed additional rights to demand information from those institutions.
But in his speech, Chopra emphasized the need for customer service at all financial institutions—calling for a return to relationship banking.
“While there are no well-established definitions, relationship banking is a model used to serve families, businesses, and communities as individuals, with an emphasis on providing customized help, rather than assembly-line style service,” Chopra said.
He added that in the U.S., that type of banking is geared toward high net-worth individuals who receive a wide-range of banking services. He added that for most households and small businesses, this type of banking often is not available.
Chopra also said that consolidation in the financial services industry is resulting in a growing number of banking deserts where consumers do not have access to in-person banking facilities.
In comments earlier this year, the Credit Union National Association and the National Association of Federally-Insured Credit Unions argued that credit unions provide the type of service that Chopra was discussing.
“Credit unions engage in relationship banking, offering their communities, including many rural and underserved communities, access to quality, affordable financial products and services, lower rates and higher dividends than big banks, and free programs including checking accounts, financial counseling, and financial education,” Ann Kossachev, NAFCU’s vice president of regulatory affairs, told the agency in commenting on fees that financial institutions charge consumers.
“Credit unions offer services that benefit their members and provide the exact type of relationship banking the CFPB Director has stated he wanted to return to,” Alexander Monterrubio, CUNA’s senior director of advocacy and counsel for consumer protection, wrote, in commenting on the same rule.” Credit unions are the original consumer financial protectors.”