WASHINGTON—Sens. Tim Scott (R-SC), Tammy Baldwin (D-WI), Mike Rounds (R-SD) and Joe Manchin (D-WV) have introduced a bill that would exempt persons regulated by a state insurance regulator from CFPB authority.
The bill’s authors say it would help clarify the limits of the CFPB regulations on insurance and ensure the Bureau's jurisdiction doesn't spread and create new burdens on credit unions.
This Senate bill, S 2702, mirrors House-bill HR 3746, which passed the House Financial Services Committee in January and awaits action by the full House.
"NAFCU and its member credit unions thank Senators Scott, Baldwin, Rounds and Manchin for recognizing the unnecessary confusion the CFPB has caused by stepping into various aspects of insurance, including those sold by credit unions," said NAFCU Vice President of Legislative Affairs Brad Thaler. "This bill, along with its House companion HR 3746, will help bring clarity to credit unions regarding insurance regulation."
CUNA wrote to the Senate in support of the bill.
“The Business of Insurance Regulatory Reform Act is a common-sense piece of legislation that would bring more clarity to the regulation of insurance products,” said CUNA President/CEO Jim Nussle. “Credit unions support the efforts of the bipartisan group of cosponsors who are seeking to rectify the CFPB’s authority on this matter and thank Sen. Scott for introducing this bill.”
“We appreciate your clarification that Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act exempted the business of insurance from the CFPB’s authority and reiterates that the regulation of insurance has been delegated to the states,” CUNA's letter reads, noting several instances in which the Bureau has proposed that would give it authority over insurance business.
These include seeking information on the sale of credit insurance and several enforcement actions.
“Consumers, particularly those who may not have access to insurance products through work or elsewhere, may rely on their credit union for these products, but the Dodd-Frank Act did not provide the CFPB authority to regulate insurance products,” the letter continues. “The CFPB's actions in this area have created uncertainty and present serious due process concerns.”