From non-bank reform, to credit card regulation, to the qualified mortgage rule, to financial protection and assistance for the military, the new Consumer Financial Protection Bureau’s top priorities seem to vary greatly depending on upon your source. While the majority of these actions have consumers' best interests in mind, the scene can be convoluted at best for financial institutions trying to determine what’s coming down the pipeline and where they should turn their attention first.
One future possibility that could incur extra cost (but also benefit) for credit unions would be regulations relating to switching financial institutions.
A Consumers Union study discovered that while 19% of bank customers considered switching their financial institution in 2011, more than 50% of them stopped short because of potential complications. Concerns about transferring their deposits and automatic payments halted 63% percent in their tracks. For 28%, it was the resulting bank fees that made them say no go to a move.
The elimination of these hindrances, as well as other lingering complications like self-activating zombie accounts, would make consumers much more open to switching financial institutions.
As a result, the Consumers Union made the following policy recommendations to the CFPB:
Banks should bear the responsibility for transferring the automatic credits and debits from old to new accounts.
Require the option of same-day electronic fund transfer at no cost to the consumer.
Reduce checkhold times on consumers’ deposits into new accounts.
Banks should not charge punitive fees to close accounts.
Closed should mean closed (in regards to account reactivation)
Require account closing disclosures.
Examine the feasibility of bank account number portability.
Similar policies are playing out worldwide, with Australia recently passing so-called Tick and Flick legislation that lets consumers sign just one form with their new institution to authorize the transfer of accounts and automatic payments from their previous financial institution.
Many stateside institutions now offer switch kits, a packet of information and forms meant to lesson the consumer's burden in breaking free. The kits don't just make it easier to leave, they can actually be used to enhance member/customer retention in the event of a merger or if the individual moves to another state the institution services, according to bankrate.com.
There are costs associated with providing any type of extra account transfer assistance. But this could be yet another way that credit unions differentiate themselves from banks, acting voluntarily and preemptively, ahead of any future regulator demands.