WASHINGTON (1/19/16)--The Consumer Financial Protection Bureau (CFPB) insists on lumping credit unions with the bad actors that caused the financial crisis, despite proclaiming it knows credit unions were not the cause. Credit Union National Association (CUNA) Chief Advocacy Officer Ryan Donovan took issue with this approach in an op-ed that appeared in The Hill last week.
Donovan stressed that consumers deserve a CFPB that, as the law requires, takes into consideration the impact its rules will have on their ability to access credit and, as the law specifically allows, exempts credit unions from rules designed to rein in the abusers of consumers.
“If the bureau doesn’t do this, the only financial services providers left standing will be the ones Director Cordray has recognized as having caused the financial crisis,” he wrote.
CFPB Director Richard Cordray, as recently as the last Credit Union Advisory Council meeting, stated that the bureau is “well aware” that credit unions were not one of the causes of the financial crisis. Cordray also said at a conference last month that those who expressed concerns about overregulation were simply being naysayers.
“Director Cordray is entitled to his opinion but not his own set of facts. There is absolutely no question the regulatory burdens placed on credit unions by the CFPB have impacted their ability to provide diverse financial products and services to their members,” Donovan wrote, adding that the U.S. Government Accountability Office recently acknowledged that there is already evidence of this impact.
Donovan cited the CFPB’s Home Mortgage Disclosure Act, finalized last October, as an example of a regulation that will be “extremely damaging” for credit unions, particularly since nearly half of all credit union loans are mortgage related.
“The Bureau’s broadsword approach to rulemaking has a tragic consequence: the very consumers it seeks to protect are harmed because financial services offered by credit unions could become more expensive and less available,” Donovan wrote. “The CFPB’s rules have created an overwhelming regulatory burden that has prompted some credit unions to stop offering certain services, leaving members with no choice but to turn to less reputable providers, or even predators in the marketplace.”