Removing Barriers Blog

CFPB's 5th Anniversary Provides Another Opportunity to Highlight Reg Burden
Posted July 21, 2016 by CUNA Advocacy

As the Consumer Financial Protection Bureau (CFPB) marked its fifth year of existence today, we sent a letter to Director Richard Cordray about our increasing concerns about regulatory burden resulting from the CFPB's actions.

The letter reiterated our concerns that credit union members are becoming collateral damage in the CFPB’s attempts to regulate banks, lenders and other financial companies that actually caused the crisis and harm consumers. While we recognize that credit unions operate in a highly regulated industry and must bear the reasonable costs of regulation, the constant stream of burdensome regulations from CFPB impairs the ability of credit unions to fully serve their members.

The letter invited Cordray and other top CFPB officials to visit a credit union headquarters to get a firsthand view of the compliance process for the various new regulatory requirements. We believe that such a visit would give these regulators a broader perspective on the large effect even a minor regulatory change may have on a credit union’s operations, and the difficulty credit unions have had over the past five years absorbing, understanding, and implementing the thousands of pages of CFPB regulatory changes.   

Our letter also requested that the CFPB more fully consider how regulations are  making life more difficult for credit union members, and highlighted a few specific areas where the Bureau could improve its regulations going forward:

  • Tailor rules to the abusers of consumers by using its exemption authority to protect credit union members (more than 75% of Congress has written to the bureau requesting the same thing);
  • Analyze the cumulative impact of rulemakings on credit unions and their members, before finalizing or proposing any new regulation that would affect them;
  • Work more closely with other regulators, including the NCUA, in order to learn how recent regulations have impacted credit unions and their ability to provide consumer-friendly products and services; and
  • Work to understand the credit union difference by visiting credit unions and becoming more familiar with their operation and how regulations, such as the new mortgage disclosure rules or the Home Mortgage Disclosure Act reporting requirements, affect day-to-day operations.