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Tomorrow, CFPB Director Richard Cordray will testify before
the Senate Banking Committee to deliver the Bureau’s semi-annual report to
Congress. This will be the first of two
appearance before Congress this month. In
advance of these hearings, CUNA sent a letter to the Banking Committee reflecting on
the impact the Bureau has had on credit unions over the last five years and to
encourage Congress to look past the hyper partisan politics of the Bureau to
enact improvements designed to minimize the adverse impact the Bureau has had
on credit unions.
We sent this letter because the CFPB is not doing enough to
make sure that its rules target the abusers of consumers and allow credit
unions continue to provide high quality and affordable financial services to
their members. Nearly every rule
impacting credit unions that the Bureau has issued has negatively affected credit unions and their members. When a
rule from any regulator reduces credit union service, or makes member service
more expensive, that rule has failed consumers.
Our letter recommended several things Congress could do to
help the situation – and many of our suggestions are ideas that either the
Administration originally proposed or we have supported from the beginning.
For example, when the CFPB was first
proposed, the Administration supported having a five-person board. That’s right! The idea for a five-person board isn't ours; it was the administrations. While it may be
counter-intuitive for us to support more regulators at the CFPB, we support the board concept because the debate
and deliberation that are achieved when more than one person is promulgating a
rule ensures that all sides are heard and the approach takes those concerns
into consideration. A CFPB Board would be consistent
not only with the democratic principles on which our country is founded but
also with the structure of other independent agencies, including the National
Credit Union Administration.
We also reiterated our support for funding the CFPB through
the appropriations process. This is
important for two reasons. First, subjecting the Bureau to the appropriations process will increase Congressional oversight and Bureau accountability. Second, we know based on the experience we
have with many state regulators, that when regulator resources are limited, they
are applied to significant issues.
If the Bureau was subject to the appropriations process, it would be under considerable pressure to more thoughtfully apply its resources to the critical issues of consumer abuse in the financial
Our letter also endorsed legislation to raise the
supervisory threshold at the CFPB from $10 billion to $50 billion in
assets. Frankly, we’d like to see the
threshold be much higher to ensure that credit unions never have to divert time
and resources from member service to engage in an additional examination, but the
legislation sponsored by Senators Toomey and Donnelly is a good first step.
There is a lot that needs to be done to focus the CFPB on
those entities that are truly hurting consumers. Credit unions aren’t the problem, but the
CFPB’s solutions are keeping credit unions from fully serving their
members. That is a problem. As we approach the CFPB’s 5th
birthday, it’s long past time for Congress to make major changes at the Bureau.
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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