New CFPB leadership can recalibrate approach to credit unions

October 26, 2021

The Consumer Financial Protection Bureau (CFPB) missed many opportunities in its first decade of existence to leverage the credit union mission for consumers, CUNA wrote Tuesday, adding that new CFPB leadership can recalibrate this approach. CUNA’s letter was sent to House Financial Services Committee leadership prior to CFPB Director Rohit Chopra’s first testimony before the committee as director.

“Because of the 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 they are not overly burdensome on credit unions.”

The letter highlights several key principles CUNA believes should guide future CFPB action, including:

  • Using its authority in a manner consistent with its original purpose and spirit of the Dodd-Frank Act by focusing on bad actors engaging in objectionable practices.
  • Appropriately tailoring regulations to reduce disruption for community-based financial institutions.
  • Being consistent and transparent during the development and implementation of rulemakings and supervision and enforcement policies.
  • 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.