The Honorable Richard Cordray Director
Consumer Financial Protection Bureau 1275 First Street, NE
Washington, DC 20001
Dear Director Cordray:
As you are aware, today marks the fifth anniversary of the Consumer Financial Protection Bureau (CFPB). The Credit Union National Association (CUNA), which represents America’s credit unions and their more than 100 million members, recognizes the CFPB’s five years of service to consumers of the financial services industry and, as you state, “five years working to ensure that banks, lenders, and other financial companies treat [consumers] fairly.” Credit unions, as you know, share this commitment as consumer protectors and play a crucially important role in the lives of their members. For the past century, they have had a mission to promote thrift and provide access to credit for provident purposes. However, over the last five years, we have become increasingly concerned that the accumulation of consumer financial services regulations is making it more difficult to fulfill this mission.
In short, we are concerned that credit union members are becoming collateral damage in the CFPB’s attempts to regulate the “banks, lenders, and other financial companies” in the industry. Credit unions recognize that they operate in a highly regulated industry and must bear the reasonable costs of regulation. However, unnecessary, overly burdensome, and duplicative regulations mean that credit union members are not able to fully access the high-quality products that credit unions provide. It also means that resources credit unions would otherwise apply to more fully serving their members are spent instead on compliance, and in 2014, the total financial impact of regulations and lost revenue on credit unions was $7.2 billion.
We write this letter to you today, on the agency’s fifth anniversary, to request that the CFPB more fully consider how regulations are in many circumstances making life more difficult for credit union members, and urge it to reconsider its approach on rulemakings. There are a few specific areas the CFPB should be focusing on to better serve credit union members going forward: Tailoring rules to focus on abusers of consumers by using the CFPB’s exemption authority to protect credit union members, analyzing the cumulative impact of rulemakings on credit unions and their members, working more closely with other regulators including the NCUA, and working to understand the credit union difference by visiting credit unions and becoming more familiar with their operations.
First, CFPB regulations should be more directly targeted at problems in the financial services marketplace. CUNA supports the mission of the CFPB, which is to make consumer financial markets work for consumers, responsible providers, and the economy as a whole. However, we do not agree with the CFPB’s application of regulatory requirements to credit unions that are responsible service providers, already heavily regulated, and in many instances, unable to absorb additional regulatory requirements intended to address the problem actors in the industry.