May 21, 2014

Contact: Vicki Christner, CUNA Communications/(202) 508-6754;


Today, the Credit Union National Association (CUNA) sent a letter to the House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit Chairman Shelley Moore Capito (R-WV) and Ranking Member Gregory Meeks (D-NY) to thank the subcommittee for holding today's hearing entitled "Legislative Proposals to Improve Transparency and Accountability at the CFPB."

Below is the text of the letter:

The Honorable Shelley Moore Capito


Subcommittee on Financial Institutions and Consumer Credit

United States House of Representatives 

Washington, DC 20515


The Honorable Gregory Meeks

Ranking Member

Subcommittee on Financial Institutions and Consumer Credit

United States House of Representatives

Washington, DC 20515


Dear Chairman Capito and Ranking Member Meeks:


On behalf of the Credit Union National Association (CUNA), I am writing today to thank you for holding today's hearing entitled "Legislative Proposals to Improve Transparency and Accountability at the CFPB."  CUNA is the largest credit union advocacy organization in the United States, representing America's state and federally chartered credit unions and their 99 million members.  We appreciate the opportunity to submit our views for the record of the hearing.


The Subcommittee is considering several bills designed to increase transparency and accountability at the Consumer Financial Protection Bureau.  Credit unions have significant interest in the activities of the Bureau because even though credit unions with less than $10 billion in assets are exempt from the Bureau's examination authority, they are not exempt from the Bureau's rulemaking authority.  As we discuss below, CUNA is supportive of several of the bills under consideration, including H.R. 3770, the CFPB-IG Act; H.R. 4383, the Bureau of Consumer Financial Protection Small Business Board Act; H.R. 4262, the Bureau Advisory Commission Transparency Act; and H.R. 4662, the Bureau Opinion Advisory Commission Act.


Discussion Draft of the "Bureau Guidance Transparency Act"

This draft bill, presented by Representative Stutzman, would require the Bureau to provide a public notice and comment period before issuing any guidance in final form.  This would be helpful for credit unions during the examination process.


For instance, in 2013, the Bureau issued guidance in the form of a compliance bulletin on indirect automobile lending without a public comment period.  Examiners often treat guidance as if it were a regulation.  Equally troubling is the trend of other Federal regulatory agencies issuing guidance without a public notice and comment period and then subsequently treating such as if it were a regulation.  CUNA looks forward to working with the bill sponsor to perfect this legislation.


Discussion Draft of the "Preventing Regulatory Abuse Act of 2014"

The draft of this bill being circulated by Representative Barr addresses a serious concern by many in the financial services industry.  The Bureau has failed to define the term "abusive" when referring to unfair, deceptive and abusive practices.   The draft bill requires the Bureau to initiate rulemaking to define the term 'abusive' with a 90-day comment period and provides the Bureau with up to one year to finalize a rule for the term "abusive."  It would be very helpful for all actors in the financial services industry to know what, precisely, the Bureau defines as "abusive." 


The draft bill also indicates that the failure to issue a final rule within the specified timeframe would remove the Bureau's authority to declare an act or practice as abusive in connection with the provision of consumer financial product or service.  However, the legislation does not indicate whether this would be an indefinite prohibition or until a rule is finalized.  Credit unions originally supported the concept of a consumer financial protection agency in order to regulate those previously unregulated - including payday lenders and other predatory lenders.  We are concerned that without additional clarification, a consequence of the legislation may be to permanently impair the Bureau's ability to protect consumers from unscrupulous actors.  We encourage the Subcommittee to consider clarifying that if the Bureau is unable to promulgate a definition of "abusive" within the time allotted by the bill, that the Bureau's ability to declare an act or practice abusive is removed until such time as the Bureau defines the term "abusive."


H.R. 3770 - The CFPB-IG Act of 2013

This bill, introduced by Representative Stivers, would create an independent inspector general for the Bureau.  Currently, the Inspector General of the Federal Reserve Board also serves as the Inspector General for the Bureau. 


Given the size of the Bureau and the scope of its mission, we believe it is appropriate for the Bureau to have its own inspector general and we support this legislation. 


H.R. 4383, the Bureau of Consumer Financial Protection Small Business Board Act

The Bureau of Consumer Financial Protection Small Business Board Act, as introduced by Representative Pittenger, would create a small business advisory board at the Bureau. The Consumer Advisory Board is already codified in statute.  While we support the notion of establishing an advisory board focused on small business issues, we would ask the Subcommittee to consider also codifying the Credit Union Advisory Council (CUAC) as part of this legislation.  CUNA testified in support of this concept on April 10, 2013.


Shortly after the Bureau was established, the Bureau leadership announced the creation of the CUAC. This group, the creation of which CUNA strongly urged, advises the agency on the impact of the Bureau's proposals on credit unions, sharing information, analyses, recommendations and the unique perspective of not-for-profit financial institutions with the agency director and staff. However, since the CUAC is not required by law, it could be abolished at any time. We believe the CUAC is an important resource for the Bureau because it provides a forum for credit union officials to provide direct feedback to the Bureau on how its proposals and final rules will affect how credit unions serve their members.


We ask Congress to codify the Credit Union Advisory Council and to require the Bureau to reimburse CUAC members for their travel and lodging expenses incurred to attend meetings of the CUAC.


H.R. 4262 - The Bureau Advisory Commission Transparency Act

Introduced by Representative Duffy, H.R. 4262 would clarify that the Federal Advisory Committee Act (Pub L. No. 92-463) applies to the Bureau.  This legislation would, in effect, open Bureau advisory committee meetings to the public. 


As noted above, while not required to do so by Congress, the Bureau established a Credit Union Advisory Council (CUAC).  This group meets four times a year, and at least half of the meetings may be in person at the Bureau headquarters. These meetings are not open to the public.  However, we feel these meetings should be open to public observation as they provide an important forum for credit union representatives to share concerns and provide practical guidance to the agency on operational and public policy issues.  CUNA supports this legislation.


H.R. 4662, the Bureau Advisory Opinion Act

Introduced by Representative Posey, H.R. 4662 directs the Bureau to create a process by which entities subject to Bureau rulemaking, including credit unions, can submit questions to the Bureau about the conformance of prospective products and services and receive within 90 days of such request a confidential opinion from the Director of the Bureau on the conformance of the prospective product with Federal consumer financial law.  In addition, any covered person that receives such guidance shall have a rebuttal presumption in a court should the financial product be later challenged by the Bureau.


CUNA supports this legislation; however, we would suggest the Subcommittee consider adding rule of construction language clarifying that the bill is not intended to require any covered person to seek guidance or approval from the Bureau prior to offering a product to its members or customers.


Discussion Draft of the "Bureau Examination Fairness Act"

This draft bill would improve the examinations process for credit unions that are examined by the Bureau.  First, it would prohibit the Bureau from including enforcement attorneys in examinations, regulate Bureau data requests during the course of the examination, place time limitations on the completion of examination field work and the issuance of exam reports and supervisory letters, and prohibit concurrent limited-scope exams at the same institutions.  Recognizing the need for efficient and meaningful exams, as well as the judicious use of credit union resources during such examinations, we believe this legislation takes a step in the right direction.


It has been nearly four years since the enactment of the Dodd-Frank Act and the creation of the Bureau.  It is appropriate for Congress to give serious consideration to legislation designed to improve the accountability and transparency of the Bureau.  On behalf of America's credit unions and their 99 million members, thank you very much for holding this hearing and considering our views.


Best regards,


Bill Cheney

President & CEO

Right Promo- Membership