CUNA expressed concerns about redundant and burdensome regulatory requirements and proposed several ideas for improving rules affecting credit unions during a meeting last week with the Consumer Financial Protection Bureau (CFPB).

Mary Dunn, CUNA’s deputy general counsel/senior vice president, addressed a number of issues with senior CFPB staff regarding:

• ATM disclosures. Requirements for duplicate disclosures on ATM screens and on the outside of the machines are not only redundant, they open the door to litigation when the outside notices have been removed, destroyed, or otherwise disabled;
• The need for a higher trigger level for purposes of reporting and compliance under the Home Mortgage Disclosure Act (Regulation C);
• The need for changes to the Truth in Lending Act, in particular to the commentary regarding multi-featured, open-end lending products;
• Limiting any possible CFPB data collections;
• Concerns about annual privacy notices; and
• Recommendations for further consolidating adverse action notices under Regulation B (Equal Opportunity Act and the Fair Credit Reporting Act) and relief from annual privacy notices.

In addition, CUNA urged the agency to streamline the regulatory requirements associated with mortgages and credit cards. CFPB is seeking comments through February 21 on streamlining the rules that were transferred to it in July.

CUNA will file an extensive comment letter after obtaining input from a number of its subcommittees, councils, and leagues.

CFPB said it wanted to “identify areas of real concern” and develop useful recommendations to address regulatory streamlining issues.

Payday lending

CFPB held its first field hearing last week on payday lending in Birmingham, Ala. Agency Director Richard Cordray spoke about the need to examine and supervise payday lenders to ensure compliance with federal consumer financial laws.

Patrick La Pine, president/CEO of The League of Southeastern Credit Unions, and his staff coordinated with the CFPB regarding the participation of Daryl McMinn, vice president of operations at Listerhill Credit Union.

In his testimony, McMinn emphasized that credit unions provide better small, short-term loan alternatives to high fee payday lenders. He provided examples of how Listerhill provides loans and other financial services to its members, as well as financial literacy programs.

In addition, he urged the agency to concentrate on the problem areas with under-regulated or unregulated financial service providers, and not to increase the already enormous regulatory burdens on credit unions.

The hearing coincided with the release of CFPB’s “Short-Term, Small-Dollar Lending Procedures” field guide that CFPB examiners will use to supervise and examine payday lenders with regard to federal consumer financial laws.

For the first time, CFPB will be able to supervise and examine all nonbank payday lenders. The field guide also describes the types of information that CFPB examiners will gather to evaluate payday lender policies and procedures, assess whether lenders are in compliance, and identify risks to consumers throughout the lending process.