CFPB seems set to throw the baby out with the bath water

Credit unions did not cause the financial crisis. They did not engage in the abuses that led to the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act. And they were not the reason that Congress created the Consumer Financial Protection Bureau. These are widely accepted assertions that CFPB Director Richard Cordray fairly frequently acknowledges himself.

As recently as the last Credit Union Advisory Council meeting, Director Cordray stated: “The Consumer Bureau is well aware that credit unions were not one of the causes of the financial crisis. You were not underwriting the bad loans that brought down the housing market. Instead, you were sounding the alarm bells well before the sinking of the economy.”

We could not agree more.

Unfortunately, instead of zeroing in on those in the marketplace who caused the financial crisis, the CFPB has insisted on lumping credit unions in with those bad actors and continues to sweep them into rulemakings that should be aimed at unscrupulous participants in the financial marketplace.

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