Removing Barriers Blog

Congress in Recess, but Regulations Still Moving Forward
Posted July 18, 2016 by CUNA Advocacy

Starting this week, Congress is beginning one of its longest recess’ in recent history, and will not be back in Washington, DC until September. While legislative hearings and votes will come to a halt during this time, many regulators are moving full steam ahead during the hot summer months in D.C. This is an ideal time for credit unions to talk to their Members of Congress about proposed regulations that could impact the industry while they are home in their districts. The comment period for three proposed rules from the CFPB overlap with Congressional recess. 

Arbitration Proposed Rule 

Comments for the Arbitration proposed rule are due to the CFPB on August 22 and to CUNA on August 12. We continue to seek feedback from credit unions who may be impacted by this rule if their member agreements contain provisions concerning arbitration, and any credit unions that are concerned about this change that will limit their ability for pre-dispute arbitration in the future. Credit union interest in this rule has grown over the past several months as a result of many new technical regulations that make them subject to frivolous class action litigation. Congress recently called for additional analysis about arbitration in the appropriations bill for FY 2017 and in the Financial Choice Act repealed the CFPB’s authority to move forward with the rule. CUNA has supported both of these legislative efforts. 

Small Dollar Lending Proposed Rule 

We are also urging credit unions who participate in the NCUA PAL program, offer small dollar or short-term loans at state-chartered credit unions, as well as credit unions who offer auto refinance loans or multi-feature open-end lending plans, unsecured loans, or shared-secured loans to examine the CFPB’s Small Dollar loan proposal for any impact it could have on your credit union and members. We've already received feedback from many credit unions and leagues, and has updated our analysis to include some of this feedback and we urge credit unions to review our most updated analysis. Comments are due to the CFPB on September 14, and to CUNA on August 31. The appropriations bill for FY 2017 also requires that the CFPB engage in additional analysis before moving forward with the Small Dollar loan rule, and CUNA has supported to concept of requiring more analysis. 

Update to Privacy Notification 

CUNA members can also thank their Members of Congress that supported provisions in the Fixing America's Surface Transportation (FAST) Act, which passed into law amending the Gramm-Leach-Bliley Act (GLBA) last year. CUNA strongly supported and advocated for the passage of this legislation, which modernizes requirements for providing information about privacy notices. The annual privacy notice has been an unnecessary compliance cost for many years. In July 2016, the CFPB, as required by the FAST Act, put out a proposed rule amending Regulation P under the GLBA to prove that a financial institution is not required to deliver a GLBA annual privacy notice if the financial institution financial institutions to use an alternative delivery method to provide annual notices. This proposal is only open for comment until August 10, with feedback due to CUNA by August 3