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Washington
Base large participant definition on market share CUNA says
WASHINGTON (8/17/11)--The Consumer Financial Protection Bureau (CFPB) should base its definition of non-depository-institution “larger participants” on the relative, local market share of those participants, the Credit Union National Association (CUNA) suggested in a comment letter. CUNA warned that using something other than the local, state-wide or metropolitan-area-based market share to define what type of firm is considered a “larger participant” could result in the CFPB “only regulating the largest nationally-active non-depository financial service providers.” Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB is authorized to supervise all sizes of nonbank payday lenders, private student lenders, and mortgage companies. The CFPB is considering regulating non-financial institution auto lenders, debt collection agencies, credit reporting agencies, prepaid credit card firms, debt relief firms, and money transfer firms. CUNA encouraged the CFPB to subject non-depository institutions to the same level of consumer protection regulations as credit unions and other depository institutions. Specifically, the CUNA letter encouraged the CFPB to regulate companies that provide check cashing, money transfers, and other services in the same manner that it plans to regulate payday lenders. The CFPB should also examine debt relief services that are provided outside of the traditional, court-based bankruptcy process to determine if these services actually benefit consumers, and should require these companies to “fairly disclose” the costs and limitations of their services. CUNA noted that debt relief services “often make misleading claims to consumers about the benefits they provide in order to collect large, upfront fees.” CUNA was among several groups that recently met with the CFPB to discuss the agency’s approach to regulating non-bank/non-credit union "larger participants" in consumer financial services. The CFPB is expected to issue an initial rule on large non-bank firm regulation no later than July 21, 2012. For the CUNA comment letter, use the resource link.


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