A bit off topic, but I just can’t resist blogging about any useless or counterproductive federal agency.
A couple weeks ago, my gym membership dues hit one of my debit cards and overdrafted one of my checking accounts (the perils of having more than one account, it seems, is that occasionally one ends up empty… but I digress…). This shocked me, since federal rules that went into effect in 2010 bar debit overdrafting and associated fees without an explicit opt-in, which there’s not a chance I would give. I called my bank and asked if they enjoyed flouting federal rules, to which they replied that these rules only apply to “one-time” transactions and my gym membership doesn’t count.
A quick review of the rules shows that they are correct that these rules apply only to “one-time” transactions, but there’s no definition of “one-time.” Debit card transactions aren’t “scheduled” with the banks or anything — merchants process them as agreed whenever they get around to it, so really, every transaction, in my opinion, is “one-time.” So where is the line drawn? If I go to a restaurant twice and use the same card, is that no longer one-time? Does it have to be on regular intervals or a specific number of instances?
The agency responsible for the rule gets the first pass at defining the ambiguous (that is, courts give “deference” to an agency as to the interpretation of their own rules, so long as that interpretation isn’t absurd). So I asked the agency responsbile for the rule: while original the rule was issued by the Federal Reserve, authority for the rule was passed on to the Consumer Finance Protection Bureau upon its creation in 2011. So I e-mailed the agency asking for their interpretation of “one-time,” and was surprised to get a fast response from an attorney for the agency who asked me to call him to discuss. I politely declined, explaining that I’d prefer it by e-mail such that I could forward a copy on to my bank if the interpretation was useful for the return of my $35 overdraft fee.
Here’s where it gets weird (well, weirder than a government agency that’s actually responsive other than when they want your money): The CFPB attorney refused to tell me the agency’s interpretation in writing. At first I’m told that “informal” guidance can’t be given in writing, and upon asking how to get formal guidance, I was told that individuals can’t.
So if consumers can’t get informal guidance in writing or formal guidance at all, who is this “Consumer” Finance “Protection” Bureau protecting? Is this another one of those, “we’ll protect the people by protecting the financial institutions” type things? Too big to fail, too big to jail, and too big to talk about in writing (unless, of course, they request it). Naturally, they picked the wrong person to refuse — I’ll be continuing my query via Freedom of Information Act requests until I have my answer.
Stay tuned tomorrow for the start of our 30-part series, “No Surveillance State Month,” where daily for the month of June I’ll be posting ways to avoid invasion of your privacy in the digital age.