WASHINGTON—The CFPB may currently be “frozen,” but its rules are still applicable, reminds America’s Credit Unions, which cautioned that CUs cannot be caught “flat-footed” during this period of uncertainty regarding the agency.
As CUToday.info has extensively reported, the Trump Administration has significantly weakened the CFPB. Although a court order is reinstating many fired employees, the agency remains largely ineffective due to restrictions on its rulemaking authority and its decision not to defend multiple court challenges to regulations established last year.
Wednesday, the House Financial Services Subcommittee on Financial Institutions will hold a hearing focusing on CFPB reform. Ana Fonseca, president/CEO of Logix Federal Credit Union, will testify on behalf of America’s Credit Unions and will voice credit unions’ priorities for updates to the Bureau, ACU said.
“I just want to be clear that even though the CFPB has been frozen, all of the statutory and regulatory requirements that come out of the CFPB are still on the books,” reminded ACU Chief Advocacy Officer Carrie Hunt. “Even though this CFPB isn't actively enforcing rules, it doesn't mean that credit unions don't have to comply with regulations. It just means there isn't an agency that is actively working to enforce those matters.”
Hunt said ACU is encouraging CUs to pay attention to CFPB rules and not be caught “flat-footed” if the agency were to be fully up and up and running again, albeit in what is expected to be a reduced capacity.
“America's credit unions and our members strongly support consumer protections. This is why we have a strong consumer protection regime…But that has created dramatic regulatory burden. Since the inception of the CFPB we have lost over 3,000 credit unions,” Hunt pointed out. “And while that isn't just due to regulatory burden, it is a huge part of the increase in cost of doing business.”
Hunt said ACU believes the CFPB needs to move forward in some fashion.
“And what that looks like I think is a is a matter of debate. We're pleased that this hearing (Wednesday) is happening,” she said. “I certainly think that the longer the CFPB stands stagnant, the more political pressure there is to come up with some meaningful reforms that are bipartisan in nature.”