WASHINGTON (3/9/15)--A bill that would authorize the Financial Stability Oversight Council (FSOC) to stay or set aside a Consumer Financial Protection Bureau (CFPB) regulation has CUNA's support. CUNA President/CEO Jim Nussle wrote to the bill's sponsor, Rep. Sean Duffy (R-Wis.), listing two reasons why CUNA supports the legislation.
The bill, H.R. 1263, would allow a majority of the FSOC to set aside a CFPB regulation if a majority of its members determined the regulation is inconsistent with safe and sound financial institution operations. It would also require the CFPB to take into consideration the impact of its rules on insured depository institutions.
"First, the two-third voting threshold under the law is, in practice, an even greater hurdle because the director of the CFPB is among the voting members. So, while the threshold is seven of the 10 members, in practice, the threshold is seven of nine members, assuming the director of the CFPB votes to support the regulation he issued," Nussle wrote.
"Second, we believe the law should permit the prudential regulators to prevent rules that are inconsistent with the operation of a financial institution from going into effect and that this standard is more appropriate stand that what is presently in law."
CUNA also suggested strengthening the legislation by expanding the conditions that must be met in order for the FSOC to override a regulation if the council determines a new rule would be unreasonably burdensome for financial institutions. This would also apply if the FSOC determined the burden to financial institutions outweighs the benefit to consumers.