WASHINGTON—CUNA continues to express disappointment in the Consumer Financial Protection Bureau’s hesitation to use its exemption authority, and outlined in a letter a number of ways it says that decision is hurting consumers.
Sent as part of the record of CFPB Director Richard Cordray’s semiannual appearance before the Senate Banking Committee, CUNA's letter highlights the impact of regulatory burden, and the fact that those issues often seem to be dismissed or go unaddressed by the bureau.
“The question that credit unions have for Congress and the CFPB is: Why have the rules changed for credit unions when they did nothing wrong in the first place?” stated CUNA President/CEO Jim Nussle in the letter. “This is not a naïve or rhetorical question. It makes very little sense for the CFPB to require credit unions, entities with no history of consumer abuse, to change the way they serve their members. It makes even less sense to do so when Congress has given the CFPB very clear and very broad authority to tailor their regulations toward the abusers of consumers.”
Not only do the rules harm credit unions, CUNA’s letter noted, but they have an impact on the members themselves, resulting in more expensive or less available products and services.
In the letter, CUNA pointed out several examples, including:
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Home Mortgage Disclosure Act rulemaking that nearly tripled the amount of required data points, which can lead to detrimental impact on consumers due to the increased regulatory burden.
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Truth in Lending-Real Estate Settlement Procedures integrated disclosure rules, which have “slowed the mortgage lending process, frustrating borrowers and lenders” in the short-term, while leading to long-term concerns of litigation issues that could arise due to technical and inadvertent violations of the new rules.
- International remittance transfer rule, which CUNA believes is too broad, has resulted in a significant reduction in service offerings. A survey of CUNA members showed almost half of credit unions that offered remittance services have either stopped or reduced the service, CUNA explained.
CUNA praised the CFPB’s recent action regarding the Helping Expand Lending Practices in Rural Communities Act, which broadens the availability of certain special provisions for credit unions and other small creditors.
“While this particular change was prompted by legislation passed by Congress, we urge the CFPB to continue to make such changes on its own accord when there is evidence that a Bureau rulemaking is stifling credit union participation in certain markets,” Nussle wrote. “Similar thoughtful analysis about the impact of rulemakings on consumers must be part of the CFPB's mission of protecting consumers in each rulemaking it puts forth.”