As one of his final actions before resigning last Friday from the Consumer Financial Protection Bureau, Director Richard Cordray sent letters to the chief executives of 29 banks, credit unions, and other financial companies urging them to help their customers attain greater control over their financial lives.
“There is enormous value in new technology that makes it feasible, right now, to enable consumers to exert much greater control over their credit cards, debit cards, and other payment methods,” Director Cordray wrote. He asserted that consumers should have the ability to easily and conveniently control how, when, and to what extent their accounts may be accessed.
Director Cordray’s letter suggested digital media platforms as the most convenient method of enabling consumers to exercise this detailed control over their accounts. He provided several examples of enhanced capabilities digital media servicing may be able to offer, such as the ability to set spending limits on each payment card for particular merchants, categories of spending, or channels of transactions (for example, online, phone, in-person, and recurring transactions). Digital media servicing could also provide consumers the ability to receive alerts or warnings if a transaction is attempted that falls outside the consumer’s personal preset parameters (or parameters for a separate authorized user). These money management tools could be offered through financial institutions’ online and mobile platforms.
Director Cordray pointed out that, as in past advisory letters, his suggestions are not regulatory requirements, but rather issues that financial institutions “would do well to consider as [they] seek to better serve [their] customers.” He posited that allowing consumers to control their own spending would lessen consumer worries about data breaches and help financial institutions minimize the incidence of fraudulent payment card usage. By helping consumers to help themselves, financial institutions will materially improve the lives of their customers, while reducing their own costs at the same time.