Removing Barriers Blog

CUNA Writes to Senate Banking Committee Prior to Hearing with CFPB Director Kraninger
Posted March 12, 2019 by CUNA Advocacy

CUNA wrote to Chairman Crapo and Ranking Member Brown prior to the Senate Banking Committee’s hearing, “The Consumer Financial Protection Bureau's Semi-Annual Report to Congress.” This was the Director’s second hearing in as many weeks.  She testified before the House Financial Services Committee last week.

Similar to last week’s hearing, Director Kraninger faced questions including the payday lending rule, the Military Lending Act authority and oversight of the student lending industry.

During the hearing, Senator Scott of South Carolina highlighted information from CUNA’s Regulatory Burden study and how regulation has affected credit union members in South Carolina.  He asked, “The CFPB has the authority to employ its exemption authority to prevent some of this harmful streamlining. Given your position, how do you plan to protect credit unions from rules that hinder their operation?”

In the letter to the Committee, CUNA wrote that the CFPB should examine and modify where necessary its approach to rulemaking.

“Under Director Kraninger’s leadership, the CFPB has an opportunity once again to examine and, where necessary, modify its approach to regulation in a manner that ensures the Bureau is fulfilling its consumer protection mission without impeding the availability of safe and affordable financial products and services.”

CUNA’s letter also included support for a bipartisan, multimember commission to lead the CFPB.

“While there are many measures the Bureau must take to improve the regulatory landscape, Congress also has a responsibility to ensure the CFPB is an effective agent of consumer protection. The current structure—with a single, powerful director—gives too much authority to one person and does not provide enough oversight and accountability. Congress should enact legislation that changes the leadership structure to a multimember, bipartisan commission,” the letter reads.

“Over the years, significant questions and concerns regarding the Bureau’s expansive power and the actions taken by both Directors have been raised by Members of Congress and other stakeholders. A multi-member commission, as envisioned by the original proponents of the Bureau, would enhance consumer protection by ensuring diverse perspectives are considered prior to finalizing rules, and would prevent disruptions caused by leadership changes,” it continues.

CUNA also issued several credit union recommendations for the CFPB’s rulemaking agenda, including:

  • Ensuring the CFPB closely monitor the impact its rules have had on credit unions and their members, and to appropriately tailor regulations to reduce burden or exempt credit unions entirely;
  • Urging the CFPB to use its statutory authority to grant appropriate exemptions from CFPB regulatory requirements;
  • Revising the CFPB’s short-term, small-dollar rule to ensure credit union participation in the market and to focus on abusers of consumers;
  • Substantially amending the CFPB’s remittances rule to make it more tailored to allow consumer access to desired products and services;
  • Consideration of additional amendments to Home Mortgage Disclosure Act reporting requirements to provide meaningful exemptions to credit unions;
  • A rulemaking that would clarify the CFPB’s Unfair, Deceptive or Abusive Acts or Practices approach, which CUNA believes is currently overly subjective;
  • Consideration of potential revisions to the Ability-to-Repay/Qualified Mortgage rule, which would include a “meaningful and prolonged feedback process;”
  • Exempting credit unions from any potential rulemaking to require financial institutions to compile, maintain and submit certain data on small business credit applications.