CUNA to Congress: CFPB hurting consumers, structural changes necessary

WASHINGTON, DC (July 15, 2015) — Consumers lose when the Consumer Financial Protection Bureau (CFPB) keeps credit unions from serving them said the Credit Union National Association (CUNA) in a letter today to the U.S. Senate Banking Committee in advance of its Wednesday hearing with CFPB Director Richard Cordray on the Bureau’s semiannual report.

“Despite promises to ‘level the playing field’ between regulated and unregulated financial product and service providers, the impact of nearly every CFPB rule to date has been to make it more difficult and more expensive for credit unions to fully serve their members,” said Jim Nussle, president and CEO of CUNA in the letter. “In fact, many credit unions have limited or eliminated certain financial products and services traditionally provided to their members as a direct result of the CFPB’s rules. When a CFPB rule or action results in credit unions reducing or abandoning service offerings, consumers have not been protected; they have been stripped of the key market-based consumer protection that is access to credit union services. To put it bluntly: consumers lose when the CFPB keeps credit unions from serving them.”

CUNA noted that credit unions’ regulatory regime, coupled with their cooperative structure, protects credit unions against ever contributing to a financial crisis.

“Five years after enactment, the Bureau has proven unwilling and unable to pursue its mission without significantly and adversely impacting how credit union members receive services from their credit union,” said Nussle. “While we have long supported structural changes to the Bureau, we believe that given the Bureau’s unwavering reluctance to fully exercise its authority to exempt credit unions from its rulemakings, Congress should seriously consider comprehensive structural changes at the Bureau to ensure that it meets its mission without jeopardizing the good work that credit unions do to serve their members.”

“We are acutely aware that on Capitol Hill the issues surrounding the Bureau are hyper partisan,” Nussle stated. “What we hope the Committee, the Congress and the Bureau understand is that for credit unions these are not political questions or problems; the actions the Bureau takes have very serious consequences on the provision of financial services to credit union members.  Ever increasing regulatory burden is the chief driver of consolidation in the credit union system.  If Congress does not step in to fix the problems, it will not only be more difficult for credit unions to serve their members, but there will be fewer credit unions to provide those services.”

CUNA recommended that Congress expand and specify the CFPB’s exemption authority, so the Bureau can go much further than it has to exempt credit unions from its rulemakings. CUNA also pushed for the CFPB to be funded through the appropriations process, which would provide an additional layer of oversight over the CFPB’s activities.

CUNA also asked Congress to pass several pieces of legislation that would provide additional oversight over the CFPB, including:

  • Financial Product Safety Commission Act of 2015 (H.R. 1266), which would change the leadership structure at the CFPB to a five-person board, instead of a single director;
  • CFPB Examination and Reporting Threshold Act of 2015 (S. 482), which would increase the threshold for examinations of credit unions and banks to $50 billion, from $10 billion;
  • Bureau of Consumer Protection Advisory Boards Act (H.R. 1195), which would codify the Credit Union Advisory Council (CUAC) as a legal requirement;
  • Helping Expand Lending Practices in Rural Communities Act (H.R. 1259), which would direct the CFPB to establish a proc4ess for determining whether an area should be designated as rural;
  • Mortgage Choice Act (H.R. 685), which would exclude from the points and fees calculation affiliated title insurance charges and escrowed homeowners’ insurance premiums;
  • Portfolio Lending and Mortgage Access Act (H.R. 1210), which would deem residential real estate mortgage loans made by credit unions and held in portfolio as “qualified mortgages;”
  • Consumer Financial Protection Safety and Soundness Improvement Act of 2015 (H.R. 1263), which would authorize the Financial Stability Oversight Council to stay or set aside any regulation of the CFPB upon a determination by a majority of its members that the regulation is inconsistent with safe and sound operations of financial institutions;
  • H.R. 2213/S. 1711, which would provide a hold-harmless period through the end of the year following the Oct. 3 effective date of the CFPB’s Truth in Lending Act-Real Estate Settlement Procedures Act integrated disclosures regulation.

About CUNA

With its network of affiliated state credit union leagues, Credit Union National Association (CUNA) serves America’s credit unions, which are owned by more than 100 million consumer members. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life. For more information about CUNA, visit or follow @CUNA on Twitter. For more information about credit unions, visit and follow @asmarterchoice on Twitter. Visit the CUNA Press Room for a full listing of media mentions, press releases and resources to stay informed on current events within the credit union industry.

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