CFPB continues to miss opportunity to leverage CU mission, structure

The Consumer Financial Protection Bureau has failed to account for credit unions’ mission and structure in its activities, a trend that has continued under Director Rohit Chopra, CUNA and NAFCU wrote to the Senate Banking, Housing, and Urban Affairs Committee. Chopra will testify before the committee Thursday.

“Unfortunately, under the current structure, the CFPB has 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,” the letter reads. “Consumers lose when one-size-fits-all rules force credit unions to pull back safe and affordable options from the market, pushing consumers into the arms of entities engaged in the very activity the CFPB’s rules were designed to curtail.

“Under Director Rohit Chopra’s leadership, the Bureau has yet again missed numerous opportunities to recalibrate its approach to regulation in a manner that fulfills its consumer protection mission without impeding consumers’ access to credit or safe and affordable financial products and services,” it adds.

CUNA and NAFCU highlighted several key principles they believe should guide any CFPB action, developed in consultation with member credit unions.

• Use the Bureau’s authority in a manner consistent with the original purpose of the CFPB and the spirit of the Dodd-Frank Act.
• Appropriately tailor regulations to reduce disruption for community-based financial institutions
• Be 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.

The organizations also highlighted specific concerns for credit unions, including the broad classification of “junk fees,” proposals to establish an “all-in” interest rate cap, and legislation to expand the scope of the Fair Debt Collection Practices Act.

CUNA and NAFCU sent a similar letter to the House Financial Services Committee for its hearing with Chopra.