The financial services and general government (FSGG) appropriations bill for fiscal year 2017 would reduce the regulatory burden on credit unions, ultimately benefiting consumers, CUNA told members of Congress Wednesday. CUNA wrote to the House Appropriations Committee and House Appropriations subcommittee on FSGG prior to a markup of the bill scheduled for Thursday.
“This legislation reduces the regulatory burden on credit unions, which will ultimately benefit members seeking the safest and most affordable products and services from credit unions--the best choice in the financial services marketplace,” wrote Jim Nussle, CUNA president/CEO.
The committee report includes language that urges the Consumer Financial Protection Bureau (CFPB) to consider the impact its rules have on small financial institutions. The CFPB has explicit power in section 1022 of the Dodd-Frank Act to tailor its regulations to exempt any class of entity from individual rulemakings.
“This report language is another strong expression of Congressional intent that will hopefully spur the agency to make necessary changes to its practices,” Nussle wrote. “The CFPB has not used this authority to the extent necessary to protect credit union products and services from the burden of sweeping regulations that should be aimed at those who caused the financial crisis.”
Reps. Steve Stivers (R-Ohio) and Adam Schiff (D-Calif.) circulated a letter earlier this year that, with efforts by CUNA, state leagues and credit unions, was signed by 329 lawmakers. The letter called for the CFPB to use its power under section 1022 to protect credit unions from regulatory burden.
The bill also contains CUNA-backed provisions that would change the leadership structure of the Consumer Financial Protection Bureau (CFPB) to a 5-person commission, from the current single director and move the CFPB under the appropriations process.
“CUNA has long supported these changes and believes consumers would benefit if the CFPB was subject to enhanced oversight and transparency,” Nussle wrote.
Similar language is also present in Rep. Jeb Hensarling’s (R-Texas)newly unveiled alternative bill to the Dodd-Frank Act, announced earlier this week.
The legislation would also require the bureau to study the use of arbitration prior to issuing any new regulations. This would affect the bureau’s recent proposal on arbitration, which CUNA believes is inappropriate for credit unions since they are member-owned, not-for-profit cooperatives.
As the CFPB works toward a final rule on the arbitration process, it is absolutely critical for credit unions to have as many tools as possible to resolve disputes. Eliminating the option to resolve disputes through pre-dispute arbitration would add to the uphill battle credit unions face in trying to continue to provide a diversity of safe and affordable products and services to members.
Nussle also expressed appreciation for the bill’s funding of key programs that assist low-income credit unions that serve underserved areas and members of modest means.
The bill also maintains funding for the two Small Business Administration (SBA)programs that are crucial to credit unions:
The letter was sent to Reps. Hal Rogers (R-Ky.) and Nita Lowey (D-N.Y.), chair and ranking member of the House Appropriations Committee, and Reps. Ander Crenshaw (R-Fla.) and Jose Serrano (D-N.Y.), chair and ranking member of the House Appropriations FSGG subcommittee.