Removing Barriers Blog

329 Members of Congress Rebuke CFPB's Interpretation of Exemption Authority
Posted March 14, 2016 by CUNA Advocacy

A bipartisan group of 329 members of the U.S. House of Representatives today sent a letter to CFPB Director Richard Cordray urging the bureau to use its rulemaking exemption authority to protect credit unions and other community-based financial institutions from provisions of Dodd-Frank. 

The letter by Reps. Adam Schiff (D-Calif.) and Steve Stivers (R-Ohio) has garnered overwhelming support from both sides of the thanks to the work of CUNA, the leagues, and members CUs. 

“Credit unions and community banks do not pose any systemic risk, yet the CFPB continues to issue rules that disproportionately hurt those community financial institutions," Rep. Stivers said. “These unnecessary and costly regulatory burdens have limited the ability of families and job creators to get access to needed credit and caused community institutions to become too small to survive."

“Credit unions play an integral role in our financial system by helping everyday consumers and businesses access credit at a local level,” said Rep. Schiff. “The CFPB should study and take into account the added burdens placed on credit unions and community banks when issuing new regulations, as these organizations are often disproportionately impacted.”

CFPB Director Richard Cordray told nearly 5,000 credit union advocates at our Governmental Affairs Conference last month that he believes the bureau cannot exempt credit unions from certain rulemakings. This letter to Cordray is a clear signal that three-quarters of the House of Representatives believe he is wrong.

The letter cites the section of Dodd-Frank that states the CFPB has the authority to adapt regulations by allowing it to exempt “any class” of entity from its rulemaking and asks the CFPB to ensure its regulations do not have the unintended consequences of limiting services or increasing costs for credit union members. 

We worked closely with the California Credit Union League, the Ohio Credit Union League, and Leagues and credit unions across the country to help secure the overwhelming support of members of the House in urging the CFPB to use its exemption authority.

Some key points about the significance of this letter:

  • During a time of hyper-partisan gridlock, the overwhelming majority of the House of Representatives on this letter shows that some issues rise above politics

  • There is more support for credit unions in this letter than any previous one, including majorities of the GOP Conference and Democratic Caucus.

  • 17 House Committee chairs signed the letter

  • Nearly 50% of Congressional leadership signed the letter

  • Support on this issue comes from every corner of the country: Maine to American Samoa; Alaska to Florida