WASHINGTON--“For too long, community financial institutions have been under a regulatory onslaught that has forced many to close or merge,” America’s Credit Unions President/CEO Jim Nussle wrote to the House Financial Services Committee Subcommittee on Oversight and Investigations ahead of a hearing focused on the CFPB.
The CFPB’s recent track record of focusing less on its statutory mission and instead on changing the marketplace in a politicized fashion is the topic of discussion in Thursday’s hearing, ACU noted.
In the letter, Nussle described the regulatory burden inBtituted onto credit unions by recent actions taken by the bureau. Nussle said implementation of Section 1071 showcased this burden.
“We have concerns about how the CFPB has chosen to carry out its authority under Section 1071,” Nussle wrote. “The overly broad scope of the CFPB’s final rule will increase burdens on community lenders and raise the cost of small business borrowing. It will also require covered financial institutions to collect data on businesses that are not ‘small businesses’ by any traditional metric. This rule adds new burdens on both lenders and small businesses well beyond what the statute intended.”
The Bureau’s recent announcement to delay implementation is a reprieve from this "short-sighted rule," said ACU, which has offered support for H.R. 976, which would formally repeal the Section 1071 final rule.
Change is needed at the CFPB, Nussle argued. He recommended a series of legislative changes that will ensure the bureau acts as a data-driven organization, within its statutory bounds, such as:
- Moving the leadership to a bipartisan commission;
- Increasing Congressional CFPB oversight;
- Providing greater clarity on UDAAP;
- Expanding and clarifying exemptions for credit unions from the CFPB;
- Raising the $10 billion threshold for institutions subject to greater CFPB oversight;
- Increasing CFPB usage of cost-benefit analysis and SBREFA panels; and
- Reforming the Civil Investigative Demand (CID) process.