Stverak: CFPB overreach harms consumers it should be helping

The Consumer Financial Protection Bureau (CFPB) consistently oversteps or fails to consider the whole impact of its regulations on credit unions and other consumer-focused institutions, CUNA Deputy Chief Advocacy Officer for Federal Government Affairs Jason Stverak wrote in American Banker. Stverak adds that this reality counters the CFPBs very mission, and ultimately harms the consumers it is supposed to help.

“The agency consistently overlooks the actions of responsible providers, instead issuing one-size-fits-all regulations. Regulations that don't consider the unique benefits and challenges faced by smaller financial institutions, including not-for-profit credit unions,” he wrote. “Regulations that make services harder to provide and, in turn, harder for consumers to access safe and affordable products and services.”

Stverak highlighted the successful challenge against the CFPB’s 1071 rule from CUNA, Cornerstone League, and Rally Credit Union as a recent positive development, but noted the bureau has issued several concerning proposals in the last few months.

• New guidance on consumer information requests, which seeks to impose more expansive limitations and obligations on covered financial institutions than Congress intended when passing the Consumer Financial Protection Act.
• The personal financial data rights proposal, which would would require financial institutions, card issuers and other payment facilitation providers to share certain consumer financial data on demand with consumers and third parties.
• Proposals related to the Fair Credit Reporting Act, which are an "unwarranted and vast expansion" of the statute and include an insufficient timeline for feedback. It also does not align with the intent of Congress in passing the FCRA.

“This is a common theme: the CFPB positioning itself between financial institutions and the consumers they serve, often using "authority" not reflected in law, or demonstrated as the intent of Congress,” Stverak wrote.  

“This is all happening while multiple courts question the CFPB's ability to write rules until its structure is deemed constitutional or not. With so many legal questions up in the air, it is even more problematic to navigate a never-ending stream of new regulations, guidance and other CFPB directives,” he added.

“The compliance burdens and resources needed to consider these massive proposals, and the planning for implementing complicated final rules, is a heavy lift for smaller financial institutions. Time spent deciphering new requirements that often aren't tailored to credit unions and community banks is time and resources taken away from serving people's financial needs and innovating with new products and services.”