WASHINGTON—CFPB Director Rohit Chopra joined NAFCU President and CEO Dan Berger for a virtual town hall discussion during which the agency’s leader said he does see the difference between CUs and banks.
During the webinar, Berger asked Chopra questions on various topics, including the Bureau’s rulemaking on “junk fees,” its guidance on adverse action notices when using artificial intelligence, and oversight of the mobile payment ecosystem.
When asked about the differences between credit unions and banks, NAFCU said Chopra remarked he does see the credit union model as different, specifically “that it does not necessarily have the same incentives.”
Additional Issues Discussed
In addition, NAFCU said Chopra discussed the interplay between fintechs and relationship banking and concerns about "non-depository and sometimes unlicensed entities being able to provide [financial services] without necessarily providing the customer service on the backend.”
He also noted that those who have relationship banking business models have lower consumer complaints and fewer problems because there “tends to be a way to work things out,” according to NAFCU.
Additional discussion points included credit union priorities, such as the need for increased fintech supervision and what the bureau is currently doing to protect consumers from emerging threats and fraud.
Senate Passes Resolution Disapproving of CFPB’s 1071 Rule
Separately, the Senate has passed a joint resolution of disapproval on the Consumer Financial Protection Bureau’s section 1071 rule. Both CU trade groups have pushed back on the proposal. CUNA noted it wrote in support of the resolution, which would void the rule through the Congressional Review Act.
The 1071 rule—finalized in March—would require credit unions to collect and report certain data on applications for credit.
“We thank the Senate for supporting our concerns that section 1071’s complexity and costs will ultimately lead to less favorable outcomes and higher costs for small business borrowers. Credit unions will bear a disproportionate burden under the final rule, which is why we support the joint resolutions against it,” said CUNA President/CEO Jim Nussle. “Credit unions support the intent of section 1071, but believe the rule as finalized would place too man barriers between small businesses and community financial institutions like credit unions.”
CUNA stated it has called for the section 1071 rule to be “appropriately tailored” to ensure credit unions can meet member business needs, and noted the rule’s implementation schedule is “aggressive, even for the largest, most technology savvy commercial lenders.”
As CUToday.info reported, House Financial Services Committee passed a similar resolution of disapproval earlier this year, but must re-vote on it to ensure consistency with the Senate-passed resolution.
CUNA, the Cornerstone League, and Rally Credit Union have also filed a motion to intervene to stay implementation of the rule for all covered entities. A previous court decision provided the stay only to members of a banking association that filed the initial challenge.
Are You Being Gouged for Bank-Like Subscription Fees for Old News? Here’s a CU-Like Way to Fix That
The biggest, best and freshest news reporting in credit unions remains free! Each morning CUToday.info delivers its daily Fresh Today news update offering the latest headlines and breaking news right to your email, with the easy-to-read headlines format allowing you to click on the stories that interest you most in order to learn more. So, stop paying those bank-fee-like subscription prices from other so-called “news”” publications!
If you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time—and it’s free!
Please note that after signing up you may need to go to your Spam/Junk folder and mark the morning headlines email as safe. CUToday.info does not provide its list of readers and emails to outside parties, and we will not be contacting you to sell you an extended warranty or sending you any links so you may cash in on an inheritance you didn’t know was coming.
And did we mention it’s free?