Joint Comments to FTC on the NPRM on Unfair or Deceptive Fees

To Whom It May Concern:

The American Bankers Association and the Consumer Bankers Association (together, "the Associations") appreciate the opportunity to comment on the Federal Trade Commission's ("FTC") notice of proposed rulemaking ("NPRM") on Unfair or Deceptive Fees ("the Proposed Rule"). Both the Associations support the FTC’s objective of ensuring that consumers understand the prices and fees associated with products and services that they buy. But the Associations have significant concerns regarding the scope of the Proposed Rule and its potential effects on our members and their customers. The Proposed Rule, as applied to the Association’s members, risks creating substantial confusion about the cost of financial products and exceeds the FTC's statutory jurisdiction.

As an initial matter, the definition of "Business" to which the Proposed Rule extends should be conformed to the boundaries of the FTC's authority and thus expressly exclude banks and savings and loan institutions. Section 5(a)(2) of the FTC Act explicitly exempts these depository institutions—including all of the Associations' members—from the FTC's jurisdiction. Further, the Proposed Rule's potential application to financial services creates a substantial risk of overlap and conflict with other specific statutes and regulations that already govern the disclosure of fees associated with financial products. The Proposed Rules would create confusion and increased risk of errors for both consumers and industry participants for mortgages, credit cards, student loans, auto loans, prepaid cards, deposit accounts, and other financial products which already are subject to specific, mandatory price disclosure regimes tailored to these products under other federal statutes, in addition to state laws. The FTC should exclude these consumer financial products and services from the scope of the rule. Lastly, in conformity with the governing statute, the Associations hereby request an informal hearing to orally present our concerns. The Magnuson-Moss Warranty-Federal Trade Commission Improvement Act requires the FTC to hold a hearing—which the FTC has not yet done—before promulgating a final rule.

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