We share many of the same principles of credit unions, because like you I’m here to serve the people and to help ensure the consumer financial markets actually work for consumers, Richard Cordray, director of the Consumer Financial Protection Bureau, told attendees Monday.
“One of our core beliefs is that honest businesses will benefit when those that cheat their customers are held accountable,” Cordray said. “We want all financial institutions—all of your competitors—to be held to the same kind of accountability that credit unions face every day.”
Unfortunately, because credit unions make costs and risks clear upfront, this can hurt them. If consumers think they can get better rates elsewhere, they’ll go elsewhere, only to be hit by hidden fees later. “That kind of backend pricing along with other harmful practices is what created the financial mess in the first place,” Cordray added.
“Before the crisis hit, only part of this multitrillion dollar market was subject to federal oversight,” Cordray said. The results: The bad practices drove out the good. The whole economy eventually collapsed, harming many innocent people in the process.
In order to level the playing field between credit unions and other institutions, “We need to hear from you about what you see going on in the marketplace,” Cordray said. “Where do you see corners being cut? Where do you see standards being bent or stretched? Where do you see the law being violated?”
Cordray added that over the next year the Bureau will implement new mortgage standards that Congress adopted in the Dodd-Frank Act. Lenders will be required to make good faith and reasonable determination that a borrower can repay a mortgage.
“We understand at the Consumer Bureau that credit unions were not the root of the financial crisis,” Cordray said. “Credit unions were among those harmed by the mortgage frenzy and credit crunch.
“Like the homeowner who has a sensible mortgage and is has been faithful in making payments, but finds that the crisis has left the family home deeply underwater, you deserve better. You deserve a fair market place where your model in steadfast customer service and service for long-term relationships can succeed.”
Millions of Americans depend on credit unions every day, Cordray said. They’re entrusting you with their hopes for their futures to claim their stake to the American Dream.
“Work with us, talk with us, guide us, and support us, and together we will be able to make it so.”