Consumer Financial Protection Bureau (CFPB) Director Richard Cordray claimed Wednesday that credit unions and other small financial institutions are a “daily concern” for the bureau in its rulemakings, a statement questioned by CUNA President/CEO Jim Nussle. Cordray said the bureau tries to avoid placing burdens in response to a question from Rep. David Scott (D-Ga.).
“It’s surprising to hear Director Cordray describe credit unions and community banks as a ‘daily concern’ of the bureau, while at the same time credit union executives, volunteers and members have continuously brought numerous concerns about proposal after proposal coming from the CFPB, which have gone unaddressed,” Nussle said. “These are concerns shared by more than 75% of Congress, from members of both parties, but there is little evidence that the bureau has given serious consideration to treating credit unions differently than abusers of consumers. This would provide much needed regulatory relief that would actually help consumers get better access to financial services from credit unions.”
Several other members of the committee questioned the bureau’s chilling effect on services to consumers. Rep. Nydia Velazquez (D-N.Y.) said credit unions in her district have come to her with concerns about rising compliance costs since the bureau finalized its remittance rule.
“We’ve been talking to all players, and there may be more we can do on that front,” Cordray said, referring to the bureau’s assessment of the remittance rule it announced last month.
Rep. Andy Barr (R-Ky.) also questioned the bureau’s remittances rule and how effective the bureau’s supposed exemption was. Barr brought up the case of Fort Knox FCU, Radcliff, Ky., which is in his home district, and its struggles with remittance costs because it does too many remittances to families overseas to qualify for the bureau’s exemption.
“Hardworking Kentucky military men and women are now having to pay much higher fees to remit funds home to their families because their credit union can’t comply with this onerous regulation,” Barr said. “The bureau has the discretion to provide the relief to these credit unions who are no longer able to deal with a workable rule to allow these remittances.”
CUNA sent a letter for the record of the hearing, coverage of which can be found here.