WASHINGTON—CFPB Director Richard Corday Wednesday said credit unions and community banks are an ongoing “concern” of the Bureau.
Cordray made that remark during his testimony before the House Financial Services Committee as part of the Bureau's 2016 semiannual report. The comment followed an exchange with Rep. David Scott, who asked Cordray what he’s doing to make sure that rulemaking is not putting any unfair burdens on small FI’s like credit unions and banks,
“It’s surprising to hear Director Cordray describe credit unions and community banks as a ‘daily concern’ of the Bureau, while at the same time credit union executives, volunteers and members have continuously brought numerous concerns about proposal after proposal coming from the CFPB, which have gone unaddressed,” said CUNA President and CEO Jim Nussle. “These are concerns shared by more than 75% of Congress, from members of both parties, but there is little evidence that the Bureau has given serious consideration to treating credit unions differently than abusers of consumers. This would provide much needed regulatory relief that would actually help consumers get better access to financial services from credit unions.”
In his opening statement Wednesday, Financial Services Committee Charmin Jeb Hensarling (R-TX) expressed surprise at Cordray’s appearance at the hearing, citing the president’s ability to remove the Director at will and reports that Cordray was to pursue an Ohio gubernatorial bid.
“There is no greater form of consumer protection than fostering competitive, innovative, and transparent markets, and then vigorously policing them for fraud, theft and deception,” said Hensarling, according to a DS News report. “In policing our markets, under Mr. Cordray’s leadership, the CFPB’s success record is anything but clear.”
According to Hensarling, the CFPB has shown an “utter disregard for protecting our markets and has made credit more expensive and less available.” Rather than acting as a “cop on the beat,” Hensarling called the Bureau the “Judge, Jury, and prosecutor all rolled up into one,” reported DS News in its analysis.
In advance of the hearing, NAFCU once again urged the House to provide credit unions with regulatory relief from CFPB regulations.
In a letter from Vice President of Legislative Affairs Brad Thaler to the leaders of the House Financial Services Committee, NAFCU noted the decline in credit unions' numbers and reiterated the trade association’s call for the CFPB to use its exemption authority under the Dodd-Frank Act to ease their regulatory burden.
"The impact of this growing compliance burden is evident as the number of credit unions continues to decline," Thaler wrote to Hensarling and Ranking Member Maxine Waters (D-CA). "Since the second quarter of 2010, we have lost more than 1,500 federally insured credit unions – over 20% of the industry. The overwhelming majority of these were smaller institutions below $100 million in assets.
"CFPB can provide relief to credit unions by using its broad legal authority granted by Sec. 1022 of the Dodd-Frank Act to exempt credit unions from various rulemakings," he continued. "Given the unique member-owned nature of credit unions and the fact that credit unions did not participate in many of the questionable practices that led to the financial crisis, subjecting credit unions to rules aimed at large bad actors only hampers their ability to serve their members."
Thaler emphasized that the exemption of credit unions from CFPB rulemaking would be well within the Bureau's legal authority. He also noted that improved guidance on CFPB rulemaking would provide "immediate help" for credit unions struggling to follow "ambiguously written rules."