ABA Statement for the Record on Consumer Protection: Examining Fees in Financial Services & Rental Housing

Chairman Brown, Ranking Member Scott, and distinguished Members of the Committee, the American Bankers Association (ABA) appreciates the opportunity to submit a statement for the record for the May 9, 2024, hearing: "Consumer Protection: Examining Fees in Financial Services & Rental Housing."

The American market for financial services is fiercely competitive. It is competitive when compared with financial services markets in other advanced economies, and it is competitive when compared with other consumer-facing industries in the United States. Banks, credit unions, credit card companies, mortgage lenders, fintechs, and other providers of consumer financial products and services compete aggressively on all aspects of their offerings—including fees. This ultra-competitive environment benefits consumers, who are free to choose from a wide variety of high-quality, convenient, innovative, and competitively priced products and services. Not surprisingly, consumers that obtain these products and services from banks are overwhelmingly satisfied. Nine in ten Americans with a bank account (87%) say they are "very satisfied" or "satisfied" with their primary bank, and 96% rate their bank's customer service as "excellent," "very good" or "good," according to a March 2024 survey conducted by Morning Consult on behalf of ABA.

For over 50 years, Congress under both Democrats and Republicans has determined that the best way to promote competition and consumer choice – while also ensuring robust consumer protection – is through disclosure-based laws and regulations. For example, one of the express purposes of the Truth in Lending Act (TILA), enacted in 1968, is to strengthen competition among providers of consumer credit through meaningful disclosure of credit terms.4 Forty years later, Congress again recognized the value of disclosures when it enacted Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The legislative history of the Dodd-Frank Act makes clear that, first and foremost, "[t]he Bureau is authorized to act to ensure that consumers are provided with accurate, timely, and understandable information in order to make effective decisions about financial transactions." In the other enumerated laws the Dodd-Frank Act made CFPB responsible for enforcing– such as the Truth in Savings Act and the Electronic Funds Transfer Act – Congress took the same approach to consumer protection. Each law reflects Congress' conclusion that "clear and conspicuous" disclosures promote informed use of products, which enhances competition and access to financial services.

Download the Statement for the Record to read the full text.