Removing Barriers Blog

House Members Press CFPB Director on Exemption Authority
Posted March 18, 2016 by CUNA Advocacy

On Wednesday, the House Financial Services Committee held a hearing titled "The Semi-Annual Report of the Bureau of Consumer Financial Protection," where CFPB Director Richard Cordray testified. A letter we sent to the committee before the hearing outlined our concerns with the regulatory approach taken by the CFPB, and its reluctance to provide credit unions with meaningful regulatory relief.  A large focus of the hearing was on the overregulation of small financial institutions, and a CUNA supported letter by Reps. Adam Schiff (D-CA) and Steve Stivers (R-OH). The letter, signed by a whopping 329 individual members of Congress, called on the CFPB to use its authority to protect small financial institutions from regulatory burden, just as Congress provided for in Dodd-Frank.

Even with over two-thirds of the House encouraging the CFPB to use its exemption authority, the Director maintained his belief that the current law would not allow him to do so. In addition to Rep. Stivers, several Members of Congress pressed the Director on this point, including Rep. Sherman (D-CA), and Rep. Royce (R-CA). We appreciate the Members who understand that the CFPB's rules are negatively impacting the ability of credit unions to provide diverse and low-cost products and services to their members, and forcing credit unions to exit certain markets.

On a positive note, Director Cordray did state that the CFPB is looking to tailor future rulemakings to avoid a one-size-fits all approach. He particularly focused on small-dollar loans and ensuring ample avenues remain in place for small-dollar lending to consumers. We will continue to work with the CFPB and the Hill to make sure this statement is reflected in the small dollar regulation that is set to be released this spring. We will continue to work with our allies to press Director Cordray to use his statutory exemption authority to exempt credit unions from certain rulemakings from the CFPB.

A full video of the hearing can be seen here.