CUNA backs Senate use of CRA for CFPB lending bulletin

April 17, 2018

CUNA backed a Senate joint resolution providing for congressional disapproval of the Consumer Financial Protection Bureau’s (CFPB) indirect auto lending bulletin Tuesday. The Senate is expected to vote on the resolution, which would void the 2013 bulletin under the Congressional Review Act (CRA) in the coming days.

“The CFPB fair lending guidance bulletin was unsupported by research or data. Credit unions support the goal of fair lending and strongly oppose any discriminatory policies. However, this guidance bulletin was also not issued through the normal course of the Administrative Procedures Act (APA) or the public rulemaking process,” wrote CUNA President/CEO Jim Nussle. “As such, we support S.J.Res.57. Policymaking in this area should be open to the public input and responsive to those comments.

"Credit unions appreciate Congress’s efforts to curtail policymaking conducted outside of the scope of authority granted to the CFPB, particularly when the agency circumvents the public protections found in the APA and other rulemaking requirements,” it adds.

The letter goes onto note that the CRA has been one tool used to combat the poorly tailored rules that unnecessarily apply to credit unions.

Under the CRA, the CFPB and other agencies must prepare a report on each final rule for each chamber of Congress and the Comptroller General of the Government Accountability Office (GAO). A GAO report found that the CFPB’s indirect lending bulletin was subject to the CRA, since the bulleting is a statement of policy designed to ensure entities are in compliance with the Equal Credit Opportunity Act.

“Credit unions support this concept since CFPB bulletins, like rules, should take into account unintended consequences on smaller financial institutions,” the letter reads. “And, credit unions and their members deserve to be protected by the requirements of the APA, such as the opportunity for Notice and Comment.”

If passed by the Senate, the joint resolution would go to the House for approval, and if approved there, would go to President Donald Trump for his signature.