CFPB rulemaking changes needed to ensure services to consumers

March 6, 2019

The Consumer Financial Protection Bureau (CFPB) should examine and modify where necessary its approach to rulemaking, CUNA wrote to the House Financial Services Committee. CUNA sent its letter for the record of CFPB Director Kathy Kraninger’s testimony before the committee Thursday, her first appearance as director.

“Under Director Kraninger’s leadership, the CFPB has an opportunity once again to examine and, where necessary, modify its approach to regulation in a manner that ensures the Bureau is fulfilling its consumer protection mission without impeding the availability of safe and affordable financial products and services,” the letter reads.

Kraninger was confirmed for a five-year term as CFPB director in December, and CUNA has met with her several times, including this week.

CUNA’s letter also continues its support of a bipartisan, multimember commission to lead the CFPB.

“While there are many measures the Bureau must take to improve the regulatory landscape, Congress also has a responsibility to ensure the CFPB is an effective agent of consumer protection. The current structure—with a single, powerful director—gives too much authority to one person and does not provide enough oversight and accountability. Congress should enact legislation that changes the leadership structure to a multimember, bipartisan commission,” the letter reads.

“Over the years, significant questions and concerns regarding the Bureau’s expansive power and the actions taken by both Directors have been raised by Members of Congress and other stakeholders. A multi-member commission, as envisioned by the original proponents of the Bureau, would enhance consumer protection by ensuring diverse perspectives are considered prior to finalizing rules, and would prevent disruptions caused by leadership changes,” it continues.

CUNA also issued several credit union recommendations for the CFPB’s rulemaking agenda, including:

  • Ensuring the CFPB closely monitor the impact its rules have had on credit unions and their members, and to appropriately tailor regulations to reduce burden or exempt credit unions entirely;
  • Urging the CFPB to use its statutory authority to grant appropriate exemptions from CFPB regulatory requirements;
  • Revising the CFPB’s short-term, small-dollar rule to ensure credit union participation in the market and to focus on abusers of consumers;
  • Substantially amending the CFPB’s remittances rule to make it more tailored to allow consumer access to desired products and services;
  • Consideration of additional amendments to Home Mortgage Disclosure Act reporting requirements to provide meaningful exemptions to credit unions;
  • A rulemaking that would clarify the CFPB’s Unfair, Deceptive or Abusive Acts or Practices approach, which CUNA believes is currently overly subjective;
  • Consideration of potential revisions to the Ability-to-Repay/Qualified Mortgage rule, which would include a “meaningful and prolonged feedback process;”
  • Exempting credit unions from any potential rulemaking to require financial institutions to compile, maintain and submit certain data on small business credit applications.