NAFCU’s Comments to CFPB on Strategic Plan

October 25, 2012

Office of the Executive Secretary
Consumer Financial Protection Bureau
1500 Pennsylvania Ave. NW
(Attn: 1801 L Street)
Washington, D.C. 20220

RE:    CFPB Strategic Plan for 2013-18

Dear Sir or Madam:

On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I write to you regarding the Consumer Financial Protection Bureau’s (CFPB) strategic plan.

The strategic plan contains four goals and eleven desired outcomes in support of the goals.  The four stated goals are: (1) preventing financial harm to consumers while promoting good practices that benefit consumers; (2) empowering consumers to live better financial lives; (3) informing the public, policymakers and the CFPB’s own policymaking with data driven analysis of consumer finance markets and behavior; and (4) advancing the CFPB’s performance by maximizing resource productivity and enhancing impact.  The plan also outlines the strategies the agency will use in order to achieve the desired outcomes.

At the outset, NAFCU would like to reiterate our support for efforts to wheel in deceptive and unscrupulous practices.  Credit unions, as CFPB officials have acknowledged numerous times, do not engage in these unscrupulous practices, are consumer-friendly entities, and did not cause the financial crisis that triggered the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act).  Due to their cooperative structure, tradition and mission, credit unions are guided by principles that focus on the well-being of their membership and operate in a manner that confers great benefits to their approximately 94 million members.  Thus, it is unnecessary for the CFPB to impose greatly burdensome regulations on credit unions.

NAFCU believes the CFPB’s strategic plan fails to place adequate focus on unregulated entities, such as nonbanks and payday lenders.  The mission that Congress delineated to the agency is to “help protect consumers from unfair, deceptive, and abusive acts that so often trap them in unaffordable financial products.” See Senate Report No. 111-176, at 11 (2010).  The failure of the strategic plan to focus on predators, and instead signaling that it would continue to impose unnecessary regulatory burden on consumer-friendly and highly regulated credit unions, simply misses the target that Congress set for the agency.  This misguided approach, we believe, can foreseeably lead to results that will hurt consumers, such as drying of credit and exiting of credible market participants from the various markets the agency is regulating.

Since its inception, the CFPB has taken a uniform approach to regulation, including regulations that apply to credit unions.  While many of the agency’s regulations implementing the Dodd-Frank Act are still in the proposal stage or not yet effective, the anticipated impact on credit unions is already being felt as credit unions begin to plan ahead.  Unfortunately, it is becoming apparent for many that the agency’s regulations will cause them to take drastic action to offset the resulting costs or, in some cases, discontinue programs.  For example, the agency’s final rule on remittance transfers has proved to be so unworkable that many credit unions plan to leave the market altogether.  Thus, with shrinking options and loss of such reliable market participants, the final rule on remittances will likely have a net negative impact on consumers absent a market-based competitive solution that will enable credit unions to continue to provide this product in a cost-effective manner.

NAFCU appreciates the opportunity to comment on the strategic plan.  We appreciate the working relationship that we have enjoyed with the CFPB, and look forward to working together to mitigate the impact of rules on credit unions.  If you have any questions or concerns, please feel free to contact me at (703) 842-2203 or


B. Dan Berger
Executive Vice President of Government Affairs

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