WASHINGTON (2/28/13)--Consumer Financial Protection Bureau Director Richard Cordray on Wednesday called on credit unions to work with the agency "to address the consumer financial issues central to the lives of people all across this country."
CFPB Director Richard Cordray said the CFPB and credit unions have worked well together since the agency's inception, and added that both groups "have much more good work" ahead. (CUNA photo)
For two years, the CFPB has enjoyed a relationship with credit unions "based on mutual respect and a common understanding of who it is we serve: the people of this country," Cordray said. "We have done good work together, and we have much more good work ahead of us.
"The people we jointly work for, your members, and American consumers, are eager to discover a new and improved consumer financial marketplace. And they deserve it," he added.
In his remarks before the Credit Union National Association's 2013 Governmental Affairs Conference, Cordray noted that it was not the traditional lending practices of credit unions that created the financial crisis.
"You were not underwriting the bad loans that brought down the housing market. Instead, you were sounding the alarm bells well before the sinking of the economy. And you were upholding sound underwriting standards even though you lost customers and market share to the financial predators," he told the CUNA GAC audience.
Cordray also addressed the CFPB's recent mortgage regulatory releases. The agency has exempted many credit unions from portions of some of these rules, and he said the exemptions express the CFPB's "recognition and acknowledgement that the traditional credit union lending model is deserving of respect and should be treated differently."
Credit unions "are member-focused," and carefully protect the people they serve, he said. "This is just the kind of service-based model that we want to encourage in the consumer financial marketplace," he added.
The mortgage market in general was also addressed during Cordray's comments. "As you know, the current mortgage market is so tight that lenders are leaving good money on the table by not lending to low-risk applicants seeking to take advantage of the current favorable interest rate climate. This actually creates a window of opportunity for credit unions that helped 'write the book,' so to speak, on what it means to underwrite responsibly," he said.
"In short, we believe that credit unions and the consumer bureau see the world in the same way: Consumers who understand their options, weigh choices appropriately and make sound decisions are good for responsible businesses and the economy as a whole," Cordray said.
For Cordray's full prepared remarks, use the resource link.