WASHINGTON–A new report from the GAO says that privately insured credit unions have largely complied with CFPB disclosure requirements of their status as non-federally insured financial institutions, but the rules for those disclosures should be clarified in guidance from the agency.
The guidance, GAO stated, would help state credit union supervisors and privately insured credit unions better interpret CFPB regulations, and inform consumers when an institution is not federally insured.
“Privately insured credit unions largely complied with the Bureau of Consumer Financial Protection (CFPB) requirements to disclose that they do not have federal deposit insurance,” GAO wrote in its report. “For instance, 45 of 47 credit unions GAO visited displayed required disclosures at teller windows, and 99 of 102 websites GAO reviewed included the disclosure on their main Internet page, as required.”
However, the GAO said it also found that disclosure signs were missing at some drive-through windows at credit union facilities, as were printed materials.
“The regulations require all advertising to include a disclosure, but do not define what constitutes advertising,” GAO stated. “In some cases, disclosure signs or text size were too small to be easily read, or were not placed conspicuously. CFPB's regulations on disclosures for privately insured credit unions do not specify signage dimensions or font size.
“Without clear disclosure requirements, state credit union supervisors and credit unions may not be consistent in how they interpret disclosure requirements and some consumers may not be informed that their deposits are not federally insured,” GAO added.
The GAO report comes after a congressional oversight group had recommended the CFPB issue guidance for the privately insured institutions on disclosure.