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#2277614 - 11/04/22 09:18 PM Paper statement fee
iheartcompliance Offline
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Our bank currently discloses a statement fee on our schedule of fees. However, we have never actually charged it. We are now pushing for E-statement enrollment and would like to start charging the statement fee to those still receiving paper statements. Management believes it is ok to begin charging because the schedule of charges was provided at account opening. What are some thoughts on this?

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#2277616 - 11/04/22 09:58 PM Re: Paper statement fee iheartcompliance
rlcarey Online
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Since you are required to send them a statement by regulation, are you and management not afraid that this will be deemed a "junk fee" by the CFPB or your primary regulator? I mean specifically charging them a fee to send them something that you are required to send sounds like a great UDAAP candidate to me regardless of how you have disclosed it.
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#2277634 - 11/07/22 01:25 PM Re: Paper statement fee iheartcompliance
HappyGilmore Offline
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Pulling people out of the ditc...
i have seen banks waive monthly service charge for accounts or charge a lower monthly service charge if they sign up for e-statements, but implementing a charge for paper statements? Ditto Randy's comments...
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#2277643 - 11/07/22 04:02 PM Re: Paper statement fee iheartcompliance
InFairness, CRCM Online
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A few years ago, a handful of banks tried implementing fees for paper statements, branch visits, etc. They got a lot of grief from regulators. Among other things, there were questions about disparate impact. Would older customers, who might be less tech savvy, and LMI customers, who have less ability to afford internet or extensive cellular data plans, face additional fees?
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#2277659 - 11/07/22 06:49 PM Re: Paper statement fee InFairness, CRCM
Chinchilla Fan Offline
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Banks still do charge a paper statement fee, including at least two of the largest. I'm not saying that won't be next to go, but it's certainly not a thing of the past.

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#2277668 - 11/07/22 08:28 PM Re: Paper statement fee iheartcompliance
John Burnett Offline
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Another thing to consider, Esmerelda. When a fee that's disclosed isn't charged over an extended period, the bank may have established a "course of dealing" that sets up customer expectations. Does management really think those customers have been sitting at home thinking each month there's another statement with no fee, "I wonder when the bank will wake up and start charging"? If this were a different sort of fee that you had suppressed over time, I'd say you need to provide a 30-day notice.

But I join the others in saying charging a statement fee is going to come back and bite!
Last edited by John Burnett; 11/08/22 06:12 PM. Reason: typo
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#2277670 - 11/07/22 08:43 PM Re: Paper statement fee iheartcompliance
Inherent_Risk Offline
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There are costs to sending out paper statements. You're generally looking at postage, print vendor charges (or paper/ink/printer maintenance/employee time if in house), processes to deal with returned mail. I also know some applaud this fee as environmentally friendly and mention it as part of climate or ESG metrics. I do not think this is on the list of future "junk fees." It's easily avoidable for most (which is how they are tying in UDAAP) and can be waived for those with limited tech knowledge/access upon request. Do some analysis on how much it actually costs to have ready for an examiner if you want to charge it.

Agree with John on magically turning on a fee that has previously been uncharged though. I'd disclose it as if it was a change if you have never previously charged it.

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#2277695 - 11/08/22 02:15 PM Re: Paper statement fee iheartcompliance
ACBbank Offline
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New York City
We charge a fee for paper statements for our prepaid card. It's a small amount and is properly disclosed, but we do charge it. So far, we have not had any issues with our regulatory partners.
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#2277699 - 11/08/22 03:00 PM Re: Paper statement fee iheartcompliance
rlcarey Online
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Well, you know what they say - it is never a problem until it is.

We all thought that way about OD fees six months ago.

And yes, there are costs involved, just like there are costs to process ODs. Giving someone a break on the monthly service fee is one thing. Specifically charging them for something that you are required to do under the law, it just seems like it would be easy pickin's for a regulator is all I am saying.
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#2277701 - 11/08/22 03:17 PM Re: Paper statement fee iheartcompliance
iheartcompliance Offline
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Thank you all for your feedback. These are my concerns as well.

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#2277713 - 11/08/22 06:26 PM Re: Paper statement fee iheartcompliance
Richard Insley Offline
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It's a complicated recipe, but take Regs E and DD (and underlying statutes), ESIGN, and "the effects test" and you can construct a very unsatisfactory outcome.

The regs require you to provide periodic disclosures "in writing." Failure to do so may create civil liability to affected consumers. Before ESIGN, "in writing" was synonymous with "paper."

ESIGN provides the (one and only) way for electronic documents to become the legal equivalent of paper documents. Congress clearly intended that the use of e-documents for legal purposes must me OPTIONAL for consumers--ergo, the "affirmative consent" provision in the act.

The "effects test" is most commonly used as legal evidence of inequity or discrimination (employment, credit, etc.) Arguably, any "behavior modification fee" that is forced on consumers has the effect of forcing them into conformity with a company's preferences.

Based on these concepts, I can see how unwilling consumers subjected to an e-document cramdown could make a reasonable argument that the bank is civilly liable for failure to provide the periodic disclosures "in writing":
a. The fee forced me (the consumer) to accept e-delivery...even though I didn't want it,
b. Since my (begrudging) agreement to pay the fee fell short of the spirit of "affirmative consent", ESIGN does not grant you (the bank) the legal right to substitute electrons for the paper statements containing the disclosures required by Regs. E and DD, and therefore
c. You have failed to deliver required disclosures, including the information that would have been my basis for giving you "notices of error" for some of the transactions.
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#2277755 - 11/09/22 03:20 PM Re: Paper statement fee iheartcompliance
Inherent_Risk Offline
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If they are paying the fee, then they would be getting disclosures in writing though, so ESIGN is irrelevant. I could see people that do ESIGN to avoid the fee saying they didn't really consent (despite signing something saying they do), but I don't think they would care too much because they aren't paying the fee. There's certainly a world where the CFPB targets this, but I just don't see it happening.

Generally less than $3 a month for a fee that is easy avoidable, and saves a million pieces of paper going directly into trashcans/recycle bins doesn't seem like a huge concern for anyone.

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#2277766 - 11/09/22 04:38 PM Re: Paper statement fee iheartcompliance
rlcarey Online
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Each bank needs to make their own risk assessment, that is all I can say. Richard makes some really good points and hopefully there are no class action attorneys lurking out there.
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#2277796 - 11/10/22 12:23 PM Re: Paper statement fee iheartcompliance
rlcarey Online
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Galveston, TX
You might also want to read the latest FTC ANPR that just came out. https://www.federalregister.gov/doc...lation-rule-commission-matter-no-r207011

"For this ANPR, the term “junk fees” refers to unfair or deceptive fees that are charged for goods or services that have little or no added value to the consumer, including goods or services that consumers would reasonably assume to be included within the overall advertised price;"

Hey consumer - we have this great checking account, but if you want a monthly statement that we are required by law to send you, you have to pay an additional $XX a month.
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