FOR IMMEDIATE RELEASE
Contact: Zan McKelway, CUNA Communications, 202 508 6701
Washington, DC (March 14, 2016) - A bipartisan group of 329 members of the U.S. House of Representatives 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 Director Richard 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. This letter to Cordray is a clear signal that three-quarters of the House of Representatives believe he is wrong.
The letter cites the 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 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.
Some key points about the significance of this letter:
• During a time of hyper-partisan gridlock, the overwhelming majority of the House of Representatives on this letter shows that some issues rise above politics
• There is more support for credit unions in this letter than any previous one, including majorities of the GOP Conference and Democratic Caucus.
• 17 House Committee chairs signed the letter
• Nearly 50% of Congressional leadership signed the letter
• Support on this issue comes from every corner of the country: Maine to American Samoa; Alaska to Florida
See full letter below:
Dear Director Cordray:
We write to express our concern that the approach taken by the Consumer Financial Protection Bureau (CFPB) - which does not routinely distinguish credit unions and community banks from some of the very large financial institutions and nonbank lenders - may unintentionally burden community based financial institutions and limit the choice and availability of consumer credit.
Credit unions and community banks provide safe and sound lending opportunities for their members and customers. Their focus on local lending and community development and the close-knit relationship they develop with those they serve is essential to preserve. As you consider consumer protection regulations, we urge you to account for the burden associated with compliance, particularly for smaller entities such as credit unions and community banks.
We want consumers to have all the information they need to make the right financial decisions for themselves and their families, and to ensure that bad actors are prevented from taking advantage of consumers. The furtherance of this mission requires CFPB not only to put in place strong consumer protections, but also to evaluate their effect on a complex financial marketplace made up of both very large financial institutions and much smaller entities.
The Government Accountability Office recently released a report on the impact of new regulatory requirements stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). The study found that there are a number of cases where financial services have been limited or discontinued by community based financial institutions due to new requirements. For example, new regulations on remittance transfers, which were imposed on all institutions that make more than one hundred transfers a year, have led to a number of smaller providers limiting or ending this service altogether due to the financial burdens associated with meeting the CFPB's new requirements.
When Congress passed the Dodd-Frank Act, it specifically recognized the need to tailor regulations to fit the diversity of the financial marketplace. Section 1022(b)(3)(a) gives the CFPB the authority to adapt regulations by allowing it to exempt “any class” of entity from its rulemakings. As you undertake rulemakings, we urge you to consider the benefits credit unions and community banks provide to their members and ensure that regulations do not have the unintended consequences of limiting services or increasing costs for credit union members or community bank customers.
Thank you for your consideration. We look forward to working with you on this important matter.