The Independent Community Bankers of America (ICBA) wants to limit the application of a new Call Report requirement for banks to include a breakdown of their income from service charges on consumer deposit accounts. 

In a notice published in the Federal Register on January 14, 2014, the Fed, FDIC and OCC (Agencies) announced that they are proposing to seek approval from the Office of Management and Budget for the new reporting requirement which would become effective March 31, 2015 for institutions with $1 billion or more in total assets that offer consumer deposit products.  In response to the Agencies’ request for comments, ICBA submitted a comment letter on
February 13, 2014 in which it expressed its “grave concerns” about the burdens imposed by the new requirement and requested that it only be applied to institutions with consolidated assets of more than $10 billion.

The new requirement was among several Call Report changes first proposed in February 2013 by the Agencies under the auspices of the FFIEC.  In addition to the Agencies, the CFPB is also a FFIEC member.  According to the Agencies, the changes were proposed “for reasons of safety and soundness or other public purposes by the members of the FFIEC that use Call Report data to carry out their missions and responsibilities, including the agencies, the [CFPB], and state supervisors of banks and savings associations.”  The Agencies indicate in the January 2014 notice that they are proposing to proceed with the new requirement despite the comment letters they received from numerous banking trade associations objecting to the February 2013 proposal. 

To satisfy the new requirement, banks would need to separately itemize the following three categories of fees on deposit accounts “intended for individuals for personal, household, and family use”:  

  • overdraft-related service charges, which would include “service charges and fees related to the processing of payments and debits against insufficient funds, including ‘nonsufficient funds (NSF) check charges,’ that the institution assesses with respect to items that it either pays or returns unpaid, and all subsequent charges levied against overdrawn accounts, such as extended or sustained overdraft fees charged when accounts maintain a negative balance for a specified period of time, but not including those equivalent to interest and reported elsewhere [on the Call Report]
  • monthly maintenance charges, including “charges resulting from the account owners’ failure to maintain specified minimum deposit balances or meet other requirements (e.g., requirements relating to transacting and to purchasing of other services), as well as fees for transactional activity in excess of specified limits for an account and recurring fees not subject to waiver
  • ATM fees for transactions, including “deposits to or withdrawals from deposit accounts conducted through the use of ATMs or remote service units (RSUs) owned, operated, or branded by the institution or other institutions (but this category would not include ATM fees levied against deposit accounts maintained at other institutions for transactions conducted through the use of  ATMs or RSUs owned, operated, or branded by the reporting institution) 

In its letter, the ICBA states that the reporting of deposit services will distort fees paid by bank customers “because many of the fees paid relate to business or other non-consumer activities even though the account relationship may have originally started as being for household or family use or the relationship is of mixed use.”  The ICBA also states that “disclosure of fees paid by bank customers is not relevant without also including disclosures about costs incurred by the bank related to servicing deposit accounts” and that, because service charges paid by consumers could be materially misstated, regulators may act improperly to the detriment of regulated institutions based on incorrect data.