The Consumer Financial Protection Bureau (CFPB) should recognize excessive or restrictive requirements would divert credit union resources from meeting member needs, CUNA wrote to the CFPB. CUNA’s comment letter was submitted in response to the CFPB’s request for information (RFI) regarding the consumer credit card market.
“While CUNA continues to support the stated intent of the CARD Act, which is to eliminate predatory credit card practices, we caution against any expansion of regulatory requirements that would make CARD Act compliance more cumbersome for community-based, member-owned credit unions,” the letter reads.
CUNA believes the CFPB should focus on ensuring its rules provide meaningful consumer protections and urge it to be cognizant that excessive or restrictive regulatory requirements have potential to divert credit unions’ resources.
The letter also provides data – obtained by the Federal Reserve’s G.19 Report – displaying credit union credit card offerings despite “regulatory and business hurdles,” including the statutory interest rate cap.
Data shows that credit card loans outstanding at credit unions stood at $74.7 billion whereas banks and the top 10 bank holdings companies had $1 trillion and $900 billion in outstanding loans, respectively. Banks see higher delinquency and charge off rates.
“CUNA supports legislative efforts to create a national data security standard that would add protections for consumers while reducing compliance burdens stemming from a patchwork of standards across the states,” the letter adds.
The CFPB is required to conduct this RFI every two years pursuant to the CARD Act.