WASHINGTON (2/19/13)--The Consumer Financial Protection Bureau's decision to allow credit unions and other financial services companies to conduct trial consumer disclosure programs is a good move, but credit unions that wish to participate may have operational concerns, the Credit Union National Association said.
Under the program, companies will be able to conduct real-world trials of disclosure alternatives. The CFPB will approve individual companies, on a case-by-case basis, for limited-time exemptions from current federal disclosure laws in order for those companies to research and test informative, cost-effective disclosures.
The companies involved will then share the results of their trial disclosure with the CFPB. The CFPB will use that information to improve its disclosure rules and model forms.
In a CFPB comment letter, CUNA Associate General Counsel Jared Ihrig said CUNA supports the concept of the proposed trial disclosure policy, but maintains concerns as to its operational feasibility for credit unions.
"Given the recent volume of newly finalized mortgage regulations issued by the bureau, many credit unions are understandably overwhelmed by the implementation burdens that lie ahead. Over the coming months, these requirements will cause credit unions to necessarily divert valuable resources to the compliance efforts associated with these new rules, which may also leave fewer resources available to explore and pursue programs such as those under the proposed policy," Ihrig wrote.
CUNA urged the CFPB to allow credit unions to partner with major financial service provider vendors, such as compliance program vendors, in order to provide added resources and collaboration in participating in the trial disclosure program. "These partnerships will allow credit unions and other financial service providers to continue serving their members, while allowing for shared additional resources that could prove extremely beneficial in allowing institutions to fully participate in a trial disclosure program. Without the use of such partnerships, many credit unions will simply not have the resources to allow their full and active participation in any trial disclosure program under the bureau's proposed policy," the comment letter said.
CUNA also encouraged the CFPB monitor the impact of this program to ensure that it does not produce a two-tier system that unduly advantages larger financial service providers, and to avoid developing programs that would favor certain classes of institutions over another.
For the full comment letter, use the resource link.