WASHINGTON (3/14/16, UPDATED 5:10 p.m. ET)--A bipartisan group of 329 members of the U.S. House today sent a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray urging the bureau to use its rulemaking exemption authority to protect credit unions and other community-based financial institutions from provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
The letter by Reps. Adam Schiff (D-Calif.) and Steve Stivers (R-Ohio) has garnered overwhelming support from both sides of the aisle and was fully led by the Credit Union National Association (CUNA), state-based credit union association leagues and member credit unions.
“On behalf of our credit unions and the 105 million members we represent, we thank Reps. Schiff and Stivers for their leadership on this vitally important matter,” said CUNA President/CEO Jim Nussle. “We are grateful that a great bipartisan majority of members of the House believe the CFPB should use the authority they granted it to exempt credit unions from the Act.”
“The letter to Director Cordray and the extensive support it has attracted represents a successful deployment of CUNA’s 360-degree advocacy to remove barriers and optimize the operating environment for all credit unions,” Nussle said.
“Credit unions and community banks do not pose any systemic risk, yet the CFPB continues to issue rules that disproportionately hurt those community financial institutions," Rep. Stivers said. “These unnecessary and costly regulatory burdens have limited the ability of families and job creators to get access to needed credit and caused community institutions to become too small to survive."
“Credit unions play an integral role in our financial system by helping everyday consumers and businesses access credit at a local level,” said Rep. Schiff. “The CFPB should study and take into account the added burdens placed on credit unions and community banks when issuing new regulations, as these organizations are often disproportionately impacted.”
CFPB's Cordray told nearly 5,000 credit union advocates attending the CUNA Governmental Affairs Conference last month that he believes the bureau cannot exempt credit unions from certain rulemakings. CUNA notes this letter to Cordray is a clear signal that three-quarters of the House of Representatives believe he is wrong.
The lawmakers' letter cites a section of Dodd-Frank that states the CFPB has the authority to adapt regulations by allowing it to exempt “any class” of entity from its rulemaking and asks the CFPB to ensure its regulations do not have the unintended consequences of limiting services or increasing costs for credit union members.
CUNA worked closely with the California Credit Union League, the Ohio Credit Union League, and state credit union leagues and credit unions across the country to help secure the overwhelming support of members of the House in urging the CFPB to use its exemption authority.
CUNA notes key points about the significance of this letter: