scenario, credit unions will then modify their efforts to meet their member’s needs such as offering free financial education, moving a payment due date to coincide with a new job, offering a workout loan, or offering other debt relief efforts.
As the CFPB has recognized in other circumstances, it is essential for credit unions to be able to communicate with their members about account information and to help their members to be financially healthy and manage debt in responsible ways. Members expect to have ongoing communications with their credit union. The earlier that a member is contacted about a late payment, the more options a credit union is able to offer to its members, and the more likely that any other credit options are not detrimentally impacted. Limiting the frequency of this communication would not be beneficial to members. Rigid and technical requirements are not necessary for credit unions, who already provide good service to member-owners to maintain relationships that are vital to the livelihood of the credit union.
Congress Has Not Provided Authority to Include Credit Unions Under FDCPA Rules
When Congress enacted the FDCPA and for decades since, it clearly recognized that including credit unions in rules addressing abusive debt collection practices is not necessary because credit unions are not only highly regulated and supervised but they also have a built-in and longstanding relationship with their members. Since the enactment of the FDCPA, no subsequent law, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), has changed this directive.
Further, Congress recently urged the CFPB to tailor its rules so financial institutions acting responsibly are not unnecessarily hampered by additional compliance requirements. Congress provided this authority expressly in Section 1022 of the Dodd-Frank Act when clearly outlining,
“The Bureau, by rule, may conditionally or unconditionally exempt any class of covered persons, service providers or consumer financial products or services from any provision of this title, or from any rule issued under this title . . . .”
Nearly 75 percent of Congress has conveyed this concern to the CFPB over the past several months, with 329 Members of the House of Representatives and 70 Senators urging the CFPB to use its authority to tailor rules to specific consumer abuses.
CUNA continues to strongly urge the CFPB to use this tool to help protect credit union members from the burdens associated with creating one-size-fits-all rules that are inappropriate for the different structure of credit unions. Credit union members benefit from open communication with their financial service provider. Unnecessary compliance burdens on that relationship that could force credit unions to instead rely more on third parties are not in the best interest of members. Furthermore, credit unions are already regularly providing detailed account information to their members, which can be as easily accessible for a member as looking on their cellphone. Accordingly, concerns about the process of contacting consumers and the amount of information a consumer is provided by a debt collector in many instances are not applicable, or may be different, for credit union members.