Bailout

Andrew Cuomo protects financial consumers

By Felix Salmon

It will be the job of the Consumer Financial Protection Agency — assuming it ever comes into existence — to crack down on banks sneaking inadequately-disclosed fees onto their customers. in the mean time, we have to make do with the Fed, and, um, the New York attorney general:

Citigroup Inc. agreed Monday to suspend plans to charge fees on certain kinds of checking accounts as part of a settlement reached with the New York Attorney General’s office.

The fees would have affected more than 1 million customers.

Attorney General Andrew Cuomo said Citigroup failed to provide adequate disclosures about the fees, and also didn’t offer a free checking program long enough before implementing the charges. Cuomo did say the bank had the right to start charging fees, but it needs to respect consumers’ rights and give proper notice.

New York’s banks are, of course, no strangers to the experience of cowering in the face of an onslaught from an attorney general with gubernatorial ambitions. But I do wonder what will happen if and when the CFPA is created, and how many turf wars there might be.

Update: Maybe Cuomo should take a look at Citi’s latest attempt to find a loophole in the new credit-card rules.

Full post as published by Macroprudential on February 02, 2010 (boomark / email).