The Consumer Financial Protection Bureau’s (CFPB) rejection of a bipartisan call for regulatory relief is troubling and the bureau is strongly encouraged to reconsider, wrote CUNA and all 37 credit union leagues representing all 50 states and the District of Columbia in a letter sent Wednesday to CFPB Director Richard Cordray.
The letter explains that Section 1022 of the Dodd-Frank Act gives the CFPB statutory authority to exempt any class of entities from CFPB rulemakings, and how CUNA and the state leagues have been joined by a bipartisan supermajority of Congress--399 members from both chambers--in their call for the bureau to exercise said authority.
“The bureau’s resistance to the plain language of the statute and the subsequent bipartisan message of more than three-quarters of the elected representatives in the federal government is baffling and disrespects the consumers who elected the Congress,” the letter reads. “We strongly encourage the bureau to reconsider its perspective on Section 1022 and finalize rules that allow credit unions to continue to offer services to consumers under the current regulatory scheme.”
“What is at stake, of course, is consumers’ continued access to safe and affordable financial services provided by cooperative financial institutions,” said CUNA and the state leagues. “Credit unions accept that they are subject to regulation, but Congress has sent strong signals through the statute and other means that that regulation must be reasonable.”
Since 2010, the cost of credit union compliance with regulatory burden has risen from to $7.2 billion in 2014 from $4.4 billion in 2010, according to CUNA’s regulatory burden study. These costs negatively impact the ability of more than 100 million member-owners to access safe and affordable credit union products.
“Much of the increase in costs have been to comply with regulations promulgated in responses to a crisis that credit unions neither caused nor contributed to, or to address abuses that credit unions have not committed. When rules make it more expensive for consumers to access safe products from credit unions, or when they make those safe products less available, consumers pay the price,” the letter reads. “With every rulemaking that ignores the statutory and Congressional message, the bureau makes it harder for credit unions to fulfill their mission.”