Don’t be afraid – you are not alone

Since the creation of the Consumer Financial Protection Bureau (CFPB) concerns have been voiced about the need for transparency in its operations and procedures. A report released in September by the Bipartisan Policy Center highlighted the need for continued rigorous transparency. This report has spurred a range of industries to come forward and voice their views. In addition to credit unions, auto dealers, mortgage lenders and others are keeping an eye on the process CFPB is using to develop guidance.

In response to a recent CFPB fair lending guidance bulletin related to auto loans, a bipartisan group of 22 U.S. Senators has raised concerns about transparency. Credit union industry representatives have noted that CFPB negotiations related to payday lending and qualified mortgages were held behind tightly closed doors.

Regardless of the merit of created guidance or regulations, the fact remains that the CFPB needs to stay focused on increasing transparency. So much so that CFPB Director Richard Cordray has even conceded to the point that certain procedures have not been as transparent as they should have been.

So, it seems, everyone is on the same page. Issues like these do not come around very often and we should take the opportunity to make the most of it. With everyone’s compass pointed in the same direction transparency can be a great jumping off point for developing working relationships with the CFPB. We have a chance to work toward a common goal on an issue that crosses industries and, hopefully, will not come with the perceived threat of being singled out by a regulator.

Staying vigilant on this issue, may also be a way to keep the door open for pushing CFPB on a seemingly overlooked portion of its purpose which is to reduce regulatory burden. There is no doubt that the CFPB has already shown that it has the consumer’s best interest at heart. Its work against payday lenders alone proves its bona fides in this regard. However, the CFPB legal mandate is more broad than that. A point that was highlighted by Elizabeth Warren in her testimony before the House Financial Services Committee in March 2011:

By law, the CFPB is obligated: 1) to ensure that consumers have timely and understandable information to make responsible decisions about financial transactions; 2) to protect consumers from unfair, deceptive, and abusive acts or practices, and from discrimination; 3) to reduce outdated, unnecessary, or overly burdensome regulations; 4) to promote fair competition by enforcing the federal consumer financial laws consistently; and 5) to advance markets for consumer financial products and services that operate transparently and efficiently to facilitate access and innovation. Building an agency that can accomplish all of these goals is a substantial undertaking.

Take note of number 3. “to reduce outdated, unnecessary, or overly burdensome regulations”. Just like the Bipartisan Policy Center report focused the conversation on transparency, we can come together with consistent messaging to focus the CFPB on this very important aspect of its business.

About Daniel A. Mica, LLC (The DMA Group)

Dan Mica, former head of the Credit Union National Association (CUNA), established The DMA Group as a means to combine a myriad of experience into a one-stop consultancy.  Elected in 1978 to represent Florida’s 11th district in the U.S. House of Representatives, Dan Mica served five terms before beginning what would become more than two decades of work in the world of nonprofits and association management. 

The DMA Group is a full-service consulting firm, providing the highest level of integrity and service through established practices and decades of experience