WASHINGTON–The House Financial Services Committee will hear the semi-annual report from the Consumer Financial Protection Bureau on Wednesday, with Director Richard Cordray appearing as a witness.
Both NAFCU and CUNA say they are expecting “sharp questions” from both sides of the aisle on rulemaking.
“In recent weeks we have raised our concerns with Congress that the CFPB is not using its statutory exemption authority as far as it could,” said Ryan Donovan, CUNA’s chief advocacy officer, referring to requests by both CUNA and NAFCU that credit unions be exempted from the CFPB’s rulemaking. “We think they should be targeting abusers of consumers. We believe the use of this authority has been the exception rather than the rule. Obviously, as (Cordray) pretty clearly stated at GAC, the CFPB pretty clearly disagrees with our view.”
As CUToday.info reported here, more than 330 members of Congress have signed a letter calling for the CFPB to use its authority to exempt credit unions from certain rulemakings.
Cordray will face questions from the committee about how the bureau’s activities are impacting consumers. Last week, in a speech before a financial trade group, Cordray said a final rule on prepaid accounts will be coming “soon” while a rulemaking process on payday lending will begin “in the coming months.”
In advance of today's hearing, CUNA and NAFCU each sent a letter to the House.
NAFCU President and CEO Dan Berger wrote, "During the consideration of financial reform, NAFCU was concerned about the possibility of overregulation of good actors such as credit unions, and this is why NAFCU was the only credit union trade association to oppose the CFPB having authority over credit unions. Unfortunately, many of our concerns about the increased regulatory burdens that credit unions would face under the CFPB have proven true. As expected, the breadth and pace of the CFPB’s rulemaking is troublesome, and the unprecedented new compliance burden placed on credit unions has been immense."
CUNA's letter cited Cordray's comments before CUNA's GAC in which he said he is aware that credit unions “made consumer protection ‘job one’ long before our agency came to be.” He added that,“We know that credit unions were not a culprit in the recent financial crisis... Credit unions did not underwrite the bad loans that sank the housing market. On the contrary, you upheld sound underwriting standards to protect consumers, even as it cost you customers and market share went to financial predators that circled those troubled waters. Your early warnings should have been heeded.”
CUNA told the House Cordray's comments support its position that the CFPB should exempt CUs from its rule making.
A copy of both letters can be found in CUToday.info's The gov section.