New House bill would help CFPB focus exam resources: CUNA

December 1, 2015

WASHINGTON (12/1/15)--CUNA sent a letter of support Monday for a bipartisan bill which would substantially increase the threshold that triggers which regulated depository institutions are subject to direct examination and reporting requirements of the Consumer Financial Protection Bureau (CFPB).

Reps. William Lacy Clay (D-Mo.) and Steve Stivers (R-Ohio), both members of the House Financial Services Committee, introduced H.R. 4099 just before the U.S. Congress adjourned for a Thanksgiving District Work Session. Clay is the ranking minority member of the Financial Services subcommittee on financial institutions and consumer credit.

The Lacy-Stivers bill would set the CFPB threshold at $50 billion in total assets, up from $10 billion.

That change, CUNA President/CEO Jim Nussle noted in the CUNA letter, would provide significant regulatory relief to the affected institutions and cause the bureau to focus directly on larger institutions and those that were previously unregulated.

"While this would not significantly change the number of institutions and percentage of assets presently subject to examination by the bureau, it would allow the bureau to more efficiently use its examination resources in the coming years," Nussle said.

He also noted, "The number of financial institutions approaching $10 billion in total assets is increasing." Without the legislative change, Nussle warned, the bureau will be required to spend more of its resources examining these newly covered institutions. That, he said, will come at the expense of other important consumer protection activities.

Raising the threshold would also signal recognition that credit unions were not the cause of the financial crisis. It would acknowledge that credit unions, regardless of size, have a different incentive structure than for-profit financial institutions because they are owned by those they serve, Nussle added.

For these reasons, he concluded, CUNA recommends H.R. 4099 be strengthened by providing for automatic adjustment of the threshold indexed for inflation.

On the Senate side, a provisions to increase the CFPB examination threshold in contained within Sen. Richard Shelby's (R-Ala.) regulatory relief package, which was approved by the Senate Banking Committee in May.