WASHINGTON—NAFCU Wednesday urged lawmakers to sign on to a letter from Sens. Joe Donnelly (D-IN) and Ben Sasse (R-NE) that pushes the CFPB to exempt credit unions from certain rulemakings.
The letter, signed by Vice President of Legislative Affairs Brad Thaler, urges the CFPB to grant credit unions relief through its authority under Section 1022(b)(3)(a) in the Dodd-Frank Act to grant exemptions on a rule-by-rule basis to “any class” of entity from its regulatory requirements. NAFCU has repeatedly pressed the bureau to use that authority more effectively.
“If the CFPB were to use its existing authority to better tailor or exempt credit unions from rulemakings intended for larger financial institutions it would result in a significant regulatory burden relief on community lenders while targeting those who created the financial crisis,” Thaler wrote. “This relief can be immediate and doesn’t require congressional action. It will also ensure CFPB resources are not wasted on implementing rules for institutions that were not the cause for the rulemaking in the first place.”
The Donnelly/Sasse letter emphasizes the negative impact of the regulatory burden experienced by community institutions since the enactment of the Dodd-Frank Act.
NAFCU said it was the only credit union trade association to oppose subjecting credit unions to CFPB authority under Dodd-Frank. The association maintains that CFPB has and should be using its authority to exempt credit unions from regulations aimed at bad actors. Donnelly’s and Sasse’s letter is similar to a letter sent to Cordray in March signed by a bipartisan group of 329 House members.
Thaler Wednesday also sent a letter to Regulatory Affairs and Federal Management Subcommittee Chairman James Lankford (R-OK) and Ranking Member Heidi Heitkamp (D-ND) regarding Thursday’s hearing, “Examining the Use of Agency Regulatory Guidance, Part II.”
In the letter, Thaler noted that the National Credit Union Administration often provides guidance to credit unions. Unfortunately, the inconsistency of examiners' interpretation of the guidance is cause for concern, he said.
"Some NCUA examiners treat the guidance as just that – a tool to be used for credit unions to comply with regulations or implement best practices. Some examiners, however, treat the “guidance” as if it were part of the regulation itself, and consider failure to comply with the guidance as something roughly equal to failing to comply with the regulation."
Thaler urged Congress to encourage consistency among examiners of regulations and guidance.
Thaler also addressed “ambiguity” in CFPB rulemaking.
“Many other financial agencies such as NCUA, FTC, FDIC, and others, issue legal opinion letters so as to help institutions and other agencies understand otherwise ambiguously written rules,” wrote Thaler. “The CFPB has declined to do so. What they have done is set up a help line where financial institutions can call for guidance from the agency."
Thaler underscored the need for the CFPB to create procedures for institutions to get much-needed official written legal advisory opinions to provide clearer guidance.