On September 19, the “Freedom and Mobility in Consumer Banking Act” was introduced by Rep. Jan Shakowsky (D-Ill.) and Senator Tom Harkin (D-Iowa). The companion bills seek to make it easier for consumers to change banks by requiring, among other things:
- Mandatory disclosures in a format that allows consumers to make meaningful comparisons between bank accounts.
- Banks not prevent consumers from closing a covered account.
- Banks not charge a fee for closing a covered account.
- Banks not reopen a closed account to apply subsequent debits, whether preauthorized or not, unless the consumer asks to have the account reopened.
- Banks to close a covered account within five days of a consumer’s request, unless special circumstances (such as a request from law enforcement) apply.
The term “covered account” includes “any check, savings or any other account that the [CFPB] may include by regulation.”
The proposed legislation may reduce the “stickiness” of customer accounts, for better or worse. Regardless of whether such changes represent additional offensive opportunity or defensive concerns for any particular financial institution, the legislation, if adopted, will require review of all accounts for compliance with the requirements.