While the Consumer Financial Protection Bureau (CFPB) has, on a limited basis, tailored some past rulemakings to smaller financial institutions, the Credit Union National Association (CUNA) is concerned with future rulemakings and how they can be tailored in a way that has a more meaningful impact in providing relief to credit unions who are all different than the largest financial institutions. CUNA’s Deputy Chief Advocacy Officer Elizabeth Eurgubian says the bureau needs to use its general authority to ensure credit unions aren’t adversely affected by rules intended to protect consumers.
“We are concentrating onseeking greater relief for credit unions in future rulemakings from the CFPB including in the forthcoming rules on small-dollar and payday lending, debt collection and overdraft protection,” Eurgubian said. “These are targeted at certain problem areas in the financial services marketplace, or at least we expect them to be, and we want to make sure that since credit unions aren’t causing these problems that there are appropriate exemptions for them in future rulemakings.”
CFPB Director Richard Cordray responded last week to a letter signed by 329 members of Congress. The letter from Congress, led by efforts from CUNA, state leagues and credit unions, called on the bureau to protect credit unions from regulatory burden stemming from overbroad rulemakings that detrimentally impact credit unions and community banks.
In his response, Cordray named several steps the bureau has taken to provide relief to small financial institutions.
According to Eurgubian, the CFPB has provided some exemptionsfor small creditors where there was specific statutory authority to do so, but the bureau was also given a general authority to exempt any class of covered persons, service providers or products and services, which it has not usedwhen necessary.
“While we thank the bureau for providing some relief to small creditors using its express authority,’ Eurgubian said. “We really hope the bureau uses the general exemption authority it was given under Dodd-Frank to ensure future rulemakings are truly targeting problem actors.”
In a meeting with the CPFB last year, CUNA informed the CFPB that credit unions generally tend to get positive reports from members in the areas of small-dollar loans, debt collection and overdraft protection, and therefore credit unions are not the parties causing harm to consumers.
CUNA has met with the CFPB many times over the past six months to discuss pending rules on small-dollar loans and overdraft protection. Cordray and his acting deputy have both said before congressional committees that the Payday Alternative Loan program available at federal credit unions will be exempt from the bureau’s rulemaking on short-term, small-dollar lending.
In the video below, CUNA Chief Advocacy Officer Ryan Donovan provides more detail into the exchanges with Cordray, as well as a look at this week in Congress and at the National Credit Union Administration's board meeting coming up Thursday.