WASHINGTON–A bill has been filed in Congress that would exempt all financial institutions of $10 billion or below in assets from the rules and regulations promulgated by the CFPB.
Sponsored by Rep. Roger Williams (R-TX), HR 3048 has the support of the Cornerstone Credit Union League. Under the bill, the Bureau could revoke an exemption to a specific rule relating to a specific class of community financial institution if the CFPB makes a detailed, written finding that the class of community financial institutions has engaged in a pattern or practice of activities that were detrimental to the interests of consumers.
The bill also allows the Bureau to change a rule or regulation issued prior to the date of enactment if the effect of the change expands a current exemption or reduces the costs and the regulatory burden associated with complying with the rule or regulation on credit unions or community banks.
“It is an exciting development in our ongoing efforts to reduce regulatory burdens for our credit unions,” said Dick Ensweiler, president and CEO of Cornerstone Credit Union League, in a statement first published by the league. “Credit unions in the Cornerstone Credit Union League region greatly appreciate Congressman Roger Williams’ leadership on this critical issue. This important legislation will ensure that consumers are protected by allowing credit unions and community banks to focus on serving the needs of their members and customers rather than spending resources on ever-growing regulations.”
The Cornerstone Credit Union League said it is working with Rep. Williams to develop HR 3048.
In response to the bill’s filing, CUNA CEO Jim Nussle sent a letter to Williams stating that Section 1022 of the Dodd-Frank Act and a number of the enumerated consumer laws expressly authorize the Bureau to provide exemptions from the requirements of statutes or implementing regulations generally or the requirements of certain provisions specifically.
“These various statutory provisions individually and together grant broad authority to the Bureau and constitute a strong legal framework to support the agency’s reasonable use of its exemption authority,” the letter reads. “We believe that the Bureau can and should go much further than it has to exempt credit unions from its rulemaking, because credit unions, unlike other financial institutions, have not engaged in the consumer abuse the Bureau is meant to address. The imposition of regulations on credit unions designed to curb abuse elsewhere in the financial marketplace has the unintended consequence of reducing access to affordable products and services for credit union members.”
NAFCU hailed the bill's introduction.
“We appreciate Representatives Williams’ and Lucas’ recognition of the importance of this exemption and their efforts to alleviate the already overwhelming regulatory burden for credit unions,” said NAFCU Senior Vice President of Government Affairs and General Counsel Carrie Hunt. “When Congress first proposed the CFPB, NAFCU was the only financial services trade association to oppose CFPB having rulemaking authority over any credit union and has always opposed any bifurcation of the industry. This bill is a very solid step in the right direction to provide credit unions critically needed regulatory relief.”