CUNA, NAFCU suggest CFPB changes, highlight CU concerns

CUNA and NAFCU suggested principles the Consumer Financial Protection Bureau (CFPB) should operate under and made other recommendations on the CFPB's structure, rulemaking, and more in a letter sent to the House Financial Services Committee Tuesday. CFPB Director Rohit Chopra is scheduled to testify before the committee Wednesday.

“Both of our associations have long held the position that, given the broad authority and awesome responsibility vested in the CFPB, a five-person commission has distinct consumer benefits over a single director,” the letter reads. “Regardless of how qualified one person may be, including the current leadership of the agency, a commission would allow multiple perspectives and robust discussion of consumer protection issues throughout the decision-making process. Additionally, a commission helps ensure some continuity of expertise and rulemaking. The current single director structure can lead to uncertainty during the transition from one Presidential administration to another.

“The U.S. Supreme Court highlighted this fact when it released a decision in Seila Law v. the Consumer Financial Protection Bureau that found the single director, removal only for ‘just cause’ structure of the CFPB to be unconstitutional,” it adds. “It is with this in mind that we urge Congressional action on legislation to transform the structure of the CFPB from a single director to a bipartisan commission.”

The organizations also highlight credit union concerns with:

• The CFPB and administration’s repeated classification of a broad range of ordinary fees in the consumer financial services market as so-called “junk fees”
• Unregulated providers increasingly engaged in financial activities by offering products intended to be glossy, tech-savvy alternatives to traditional loan products.
• Recent efforts to overhaul credit reporting requirements, which would grossly expand the scope of the Fair Credit Reporting Act without sufficient detail regarding the specific proposals the Bureau plans to evaluate.
• CUNA and NAFCU strongly oppose proposals that would seek to establish a national “all-in” usury cap applicable to credit unions.
• Legislation that would expand the scope of the Fair Debt Collection Practices Act (FDCPA) to cover business loans, which could potentially disrupt the management of commercial lending portfolios, increase the cost of and reduce access to credit for small business borrowers.

CUNA and NAFCU sent a similar letter to the Senate Banking, Housing, and Urban Affairs Committee for the record of Chopra’s appearance before that committee Thursday.