Consumer Financial Protection Bureau (CFPB) Director Richard Cordray responded Friday to 329 legislators who wrote him calling for the bureau to use its exemption authority to achieve regulatory relief. While Cordray’s letter outlines some steps the bureau has taken to tailor its regulations, the Credit Union National Association (CUNA) is calling for more substantive relief.
“We are glad to see the director responded to the concerns voiced by Congress, and appreciate some of steps the CFPB has taken in the right direction to provide relief--such as making the changes prompted by the HELP Act, which broaden the relief for small creditors offering mortgages in rural and underserved areas. Nevertheless, the thousands of pages of new regulations from CFPB are a continuing burden on credit union operations and the outlined relief in the letter has had a minimal impact on this as a whole,” said Ryan Donovan, CUNA’s chief advocacy officer. “The bureau has an important opportunity to provide more significant relief to credit unions during upcoming rulemakings on payday lending, debt collection and overdraft protection, and to make changes where needed in rules that have been finalized.
“We appreciate the leadership of Reps. Adam Schiff (D-Calif.) and Steve Stivers (R-Ohio), and the members who wrote to the CFPB, and we appreciate that Director Cordray responded to the inquiry,” Donovan added.
The 329 members wrote to the bureau expressing similar concerns that CUNA has with burdensome regulations: that they have the opposite of their intended effect and can harm consumers by forcing small financial institutions to withdraw products and services from the market.
CUNA has pushed the bureau a number of times to use its exemption authority, granted by Congress in section 1022 of the Dodd-Frank Act, to provide credit unions and other small financial institutions significant regulatory relief so they can continue to serve the communities they’re closest to.
Many members of Congress on both sides of the aisle and in both chambers agree with this. Most recently, Sen. Tim Scott (R-S.C.) pressed Cordray on the exemption authority during a recent Senate Banking Committee hearing.
In a blog post CUNA outlined where they believe relief cited in the letter did not go far enough to properly address credit union concerns.
For example, the CFPB exempted lower-volume depository institutions from Home Mortgage Disclosure Act (HMDA) reporting, but CUNA has pointed out on numerous occasions that the exemption does not go far enough.
CUNA has suggested an exemption on HMDA reporting on home equity lines of credit, as an example of helpful relief. It is also practical, since this reporting was previously voluntary.