NAFCU Letter to CFPB Regarding Trial Disclosure Program

February 14, 2013

Consumer Financial Protection Bureau
Monica Jackson
Office of the Executive Secretary
1500 Pennsylvania Ave. NW
Washington, DC 20220

RE: CFPB–2012–0046; Policy to Encourage Trial Disclosure Programs; Information Collection

Dear Ms. Jackson:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I am writing to you regarding the Consumer Financial Protection Bureau’s (CFPB) request for comment on Policy to Encourage Trial Disclosure Programs; Information Collection. As a preliminary matter, NAFCU and its members appreciate any attempt by the CFPB to provide credit unions a waiver from regulatory burden and mounting compliance costs. NAFCU has some specific thoughts on the program as well as more general concerns regarding the structure of the program and the financial burden it puts on credit unions and their members.

The program permits interested parties to submit alternative disclosure or other forms for agency approval. Those forms must comply with the minimum eligibility standards and may include modifications to existing model forms, changed delivery mechanisms, wholesale changes, or elimination of select disclosure requirements. A credit union that is interested in developing an alternative must make the necessary financial and other investments itself.  Further, the CFPB may revoke any approved waiver. Accordingly, credit unions may be required to invest in not one, but two disclosure requirements; the first being the trial disclosure designed by the credit union for the program and the second being a disclosure that meets currently-defined standards as well, in case the Bureau were to revoke the approved waiver.

NAFCU and its members are supportive of regulatory relief and using waivers as a means to spur innovation, but this program puts the cost and the responsibility on individual credit unions to design new disclosures. As the program is proposed, the rules for eligibility make it very time consuming and expensive with little benefit for the credit union or the consumer. Credit unions are already being heavily burdened by the deluge of new regulations. The likelihood of many of our members participating in this program is very small without financial incentives to help defray the costs of this program.  The fact that the program would require two, not just one, set of disclosures to be developed will only make it more unlikely that credit unions will participate.

In order to combat the prohibitive costs associated with participating in this program, the CFPB could offer grants to participating credit unions or allow a group of credit unions to work and participate together in the program. The CFPB should also consider other methods of gathering consumer understanding of disclosures such as small focus groups.

NAFCU appreciates the opportunity to provide feedback.  If you have any questions or concerns, please feel free to contact me at (703) 842-2215 or PJ Hoffman, Regulatory Affairs Counsel, at (703) 842-2212.


Fred R. Becker, Jr.
President and CEO

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