CFPB should tailor regulations, install leadership commission

March 10, 2020

The Consumer Financial Protection Bureau’s (CFPB) execution of its regulatory agenda should ensure credit unions are able to provide efficient, safe and affordable products and services, CUNA wrote to the Senate Banking Committee. CFPB Director Kathy Kraninger appeared before the committee for her semi-annual testimony Tuesday.

“America’s credit unions value the CFPB's mission, ‘to make consumer financial markets work for consumers, responsible providers, and the economy as a whole.’ Unfortunately, credit unions’ ability to provide their members with high-quality and consumer-friendly financial products and services has been significantly impeded by several rules promulgated under past leadership,” the letter reads. “As mentioned above, the CFPB's overly broad approach to rulemaking resulted in burdensome regulatory requirements being imposed on credit unions based on the mistakes and irresponsible practices of other industry stakeholders.”

CUNA’s letter also reiterates its support for a bipartisan, multimember commission to lead the CFPB. Last week the U.S. Supreme Court heard a case related to CFPB leadership, and CUNA also supports a bill to replace the current single director with a commission.

“To ensure consumers benefit from both strong protections as well as regular access to products and services, Congress should enact legislation that changes the Bureau’s leadership structure to a multimember, bipartisan commission,” the letter reads. “A multi-member commission, as envisioned by the original proponents of the Bureau, would enhance consumer protection by ensuring that diverse perspectives are considered prior to finalizing rules and prevent disruptions caused by leadership changes. Credit union members and other consumers would benefit from transparent policymaking that includes more voices.

“This structure is consistent with the traditions of our democracy and would provide certainty that is essential for consumers and the financial services industry, regardless of which political party controls the White House,” it adds.

  • Using its statutory authority to grant appropriate exemptions from CFPB regulatory requirements;
  • Not extending the scope of its debt collection rulemaking to include first-party collectors;
  • Revising its short-term, small-dollar rule to ensure credit union participation in the market and to focus on abusers of consumers;
  • Adopting several revisions to its proposed remittances rule to balance consumer protections with consumer access;
  • Considering additional amendments to Home Mortgage Disclosure Act reporting requirements to provide meaningful exemptions to credit unions;
  • Considering potential revisions to the Ability-to-Repay/Qualified Mortgage rule, which would include a “meaningful and prolonged feedback process;”
  • Provide greater clarity on CFPB’s Unfair, Deceptive or Abusive Acts or Practices approach, which CUNA believes is currently overly subjective;
  • Exempting credit unions from any potential rulemaking to require financial institutions to compile, maintain and submit certain data on small business credit applications.
  • Continuing its engagement with the credit union industry through the Credit Union Advisory Council, roundtable discussions, webinars and other open communications;
  • Basing its rulemakings on thorough data and research;
  • Providing compliance resources to the financial industry, including frequently asked questions with interpretations, webinars with opportunities for questions, annual outreach to stakeholders, among others; and
  • Working with CUNA, credit unions and the National Credit Union Foundation in its consumer education efforts and use those efforts to guide consumer choices and provide a foundation for solid consumer financial health.