CFPB under Chopra should balance consumer protection, access to services

CUNA wrote to new Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra Tuesday highlighting several key principles that should guide future CFPB actions. Chopra was confirmed in September by the Senate to lead the CFPB.

“Credit unions are the original consumer financial protectors. Because of our not-for-profit, member-owned cooperative structure credit unions are not subject to the same profit-first motives that have become characteristic of for-profit financial services providers,” the letter reads. “This distinction, combined with a track-record of providing consumer-friendly financial services, is a key reason that rules and regulations should be tailored so that they are not overly burdensome on credit unions.

“Unfortunately, the Bureau, in its first several years of existence, missed many opportunities to leverage credit unions’ mission and history to the benefit of consumers, and finalized regulations that ultimately hampered credit unions and their members,” it adds.

CUNA believes the following principles should guide CFPB actions:

• Use the Bureau’s authority in a manner consistent with the original purpose of the CFPB and the spirit of the Dodd-Frank Act by focusing on the businesses actively engaged in objectionable practices that exploit consumers. We believe this balance can be accomplished without sacrificing important consumer protections. 
• Appropriately tailor regulations to reduce disruption for community-based financial institutions, using the authority granted by Section 1022 of the Dodd-Frank Act. This allows the CFPB to conditionally or unconditionally exempt any entities from rules it issues.
• Be consistent and transparent during the development and implementation of rulemakings or supervision and enforcement policies.
• Regularly engage stakeholders throughout the policymaking process, including preserving the Credit Union Advisory Council, using the Request for Information (RFI) and Advance Notice of Proposed Rulemaking (ANPR) processes, and working to ensure that the Small Business Regulatory Enforcement Fairness Act (SBREFA) process is efficient and effective.
• Consult with NCUA during the policymaking process and avoid implementing duplicative or contradictory policies
• Provide certainty to regulated entities by adopting clear “rules of the road” and prioritizing internal consistency 
• Conduct thorough research prior to the adoption of a new rule or policy and base policy decisions on relevant data 
• Ensure continued access to credit from reputable providers
• Encourage and support innovation in the consumer financial services marketplace through the adoption of mechanisms like the revised Trial Disclosure Program, the No-Action Letter Policy, and the regulatory “sandbox” policy.