Consumer Financial Protection Bureau (CFPB) Director Richard Cordray and his staff met with several credit unions in Anchorage, Alaska, to discuss issues these credit unions face each day as a result of the past five years of increasing CFPB regulations.
The Nov. 18 meeting was organized by the Alaska Credit Union League with Sen. Dan Sullivan’s (R-AK) office. CUNA Deputy Chief Advocacy Officer & Senior Counsel Elizabeth Eurgubian also attended the meeting, as part of the coordinated advocacy efforts between CUNA, the Leagues, and credit unions.
The credit unions discussed their history and why credit unions were established in Alaska; for the primary goal of helping consumers gain access to financial services they were not receiving elsewhere.
The credit unions told Cordray that there is common ground between the CFPB and credit unions, who all have a common mission “to serve consumers first and foremost.”
However, they also expressed serious concerns about the cost of complying with CFPB regulations and the disproportionate impact the new rules have on smaller institutions and credit unions.
The Alaska credit unions further pointed out that regardless of size and business complexity, all financial institutions have to follow the same CFPB regulations and requirements, with only minimal and rare exceptions.
They urged the CFPB to consider that smaller and less complex financial institutions, such as credit unions, should have more flexible regulatory requirements, or more exemptions from current requirements.
The increased amount of broad, sweeping regulation coming from the CFPB in the past 5 years has been very problematic for credit union and the members they serve, creating an increase in compliance expenses at credit unions, which is perplexing given that credit unions did not cause the financial crisis that sparked the massive rulemaking.
Consumers can be harmed by this burden, the credit unions noted, if compliance costs for unneeded rules forces a credit union to stop or limit the financial services they provide. This is especially significant in states such as Alaska where access to credit and other financial services may be less available for many consumers.
CUNA will continue to communicate this message with lawmakers throughout Washington, D.C., and will continue to fight for more exemptions for credit unions from existing and upcoming regulatory requirements.