WASHINGTON—CUNA has expressed concerns the Office of the Comptroller of the Currency is considering “industry altering changes” without sufficient public consideration, it wrote to the agency. CUNA also sent several other letters related to different issues, as reported below.
Acting Comptroller Brian Brooks has publicly stated that the OCC is considering implementing a special purpose bank charter limited to payments services, CUNA stated.
“Although Acting Comptroller Brooks in his comments mentions that this charter will have a narrow focus within the Comptroller’s authority, we are concerned chartering such a special purpose bank represents a significant policy change at the OCC that should only be done after careful consideration and public rulemaking so that public policy and the public’s interests can be thoroughly considered,” CUNA wrote.
“Changes to bank charters impact the public, state regulatory schemes and other business that rely on consistent regulations to operate. All stakeholders should have the opportunity to voice concerns and the implications of important changes in policy should be carefully weighed before the changes are made, especially when there can be broader impact on the delivery of financial services,” CUNA added.
Level the Playing Field
CUNA said the concern comes from the belief that any entity offering products or services commonly associated with financial institutions should be subject to the same regulation as a financial institution, and that consumers obtaining the product should receive the same protections.
“Similar to many other industries, depository institutions’ business models are impacted by technology and innovation from within and outside the industry, as well as regulatory constraints,” the letter reads. “Nonetheless, any change to a Federal banking charter shouldn’t happen behind closed doors and must only be considered in an open and transparent process.”
Support for New Bill
Separately, CUNA CEO Jim Nussle released a following statement after Sen. Brian Schatz (D-HI) introduced a bill Tuesday that would create a $2 billion Community Development Institutions (CDFI) crisis fund to help with pandemic recovery and other emergencies:
“The pandemic and ensuing economic crisis has had a disproportionate impact on vulnerable communities and the policy response needs to recognize that more needs to be done to help these communities recover. Sen. Schatz’s legislation to create CDFI National Crisis Fund will ensure that CDFI credit unions can get much needed resources to our most vulnerable communities, reducing the pain experienced as the result of any number of disasters.”
Nussle sent a letter to Sen. Schatz in support of the legislation.
The bill’s $2 billion CDFI Crisis Fund would serve as a complement to the Treasury’s CDFI Fund. It would be refilled as funds are deployed each year, and can be activated nationally or state-wide through two automatic triggers, CUNA noted:
- For economic crisis: An increase in the state’s six-month moving average of the national unemployment rate (or if nationally, three-month moving average) by 0.50 percentage points or more relative to its low during the previous 12 months; or
- For natural disasters: A Stafford Act major disaster declaration where the Individual Assistance Program is activated. Funds are available state-wide if a majority of residents live in a declared county, or for affected county use otherwise.
As of July 13, there were 331 CDFI certified credit unions nationwide.
Other Letters Sent
In addition, CUNA sent several other letters, including:
* A letter was sent to the CFPB expressing appreciation for the Bureau’s proactive effort to amend Regulation Z to facilitate the LIBOR transition for consumer financial products in response to LIBOR’s planned discontinuation after 2021. CUNA said it generally supports the Bureau’s proposal and believes clarity of compliance expectations surrounding the LIBOR discontinuation is beneficial for financial institutions and, ultimately, consumers.
* CUNA sent a letter in response to a CFPB proposal that would amend Regulation F to require debt collectors to make certain disclosures when collecting time-barred debts (debts for which the applicable statute of limitations has expired). Senior Director of Advocacy & Counsel Alexander Monterrubio noted that the agency should ensure its debt collection rulemakings do not extend unwarranted regulatory requirements to first-party debt collectors. The full letter can be found here.
“We respectfully recommend the Bureau continue to rely solely on its Fair Debt Collection Practices Act (FDCPA) authority when promulgating rules governing the practice of debt collection,” Monterrubio wrote. “The FDCPA provides the Bureau with ample ability to achieve its desired limitations on third-party collections without exposing credit unions that collect their own debts to expanded regulatory compliance and litigation burden.”