WASHINGTON—NAFCU this week met with CFPB staff to discuss the next steps in the Bureau's implementation of Section 1071 of the Dodd-Frank Act, which would require financial institutions – including credit unions – to collect small business-related information and report it back to the CFPB.
NAFCU said it is still working to exempt credit unions from any future rulemaking on this issue.
NAFCU Senior Regulatory Affairs Counsel Michael Emancipator, Regulatory Affairs Counsel Andrew Morris and Regulatory and Legislative Assistant Sarah Jacobs attended the meeting.
During the meeting, NAFCU reiterated to the CFPB credit unions' uniqueness and their limited authority for member business lending. The association also urged that the Bureau exempt the industry from any future rulemaking that would require further disclosure of business loan information.
The CFPB issued a request for information last year as it considers how to implement Section 1071 of the Dodd-Frank Act, which could lead to data collection and reporting similar to the type required under the Home Mortgage Disclosure Act (HMDA). Section 1071 seeks to facilitate enforcement of fair lending laws and help users of the data being collected better identify the needs of women- and minority-owned, and other small businesses.
Separately, NAFCU President and CEO Dan Berger made several recommendations to the CFPB in a letter regarding its ongoing review of the agency's HMDA data collection activities – including limiting the collection to only those fields mandated under the Dodd-Frank Act.
"Credit unions have already incurred substantial costs resulting from system upgrades and hiring of new staff to implement HMDA's vastly expanded requirements," Berger wrote to CFPB Acting Director Mick Mulvaney. "Limiting the number of data points collected would mitigate some of these costs and reduce compliance overhead, giving credit unions more flexibility to grow, develop innovative products, and serve their communities."
Berger added that limiting the HMDA data collection also serves to protect borrower privacy. The CFPB should also limit the public disclosure of HMDA loan data as an added way to protect the privacy of sensitive consumer information, Berger wrote.
Regarding overall privacy concerns, Berger thanked Mulvaney for initiating a review of the CFPB's data security systems to address known risks.