WASHINGTON—Regulatory over-reach is harming credit unions, NAFCU told the House Financial Services Subcommittee on Financial Institutions and Monetary Policy in a letter ahead of a hearing on the issue.
In the letter, Senior Vice President of Government Affairs Greg Mesack noted the number of credit unions has declined by more than half since the passage of the Dodd-Frank Act.
Moreover, wrote Mesack, another “major reason” for the decline in credit unions is CUs have been made subject to the rules and regulations of the CFPB, even though credit unions are already subject to strict field of membership and capital restrictions, as well as numerous consumer protection provisions in the Federal Credit Union Act
“As such, the CFPB should be more cognizant of the unique characteristics of the credit union industry and the benefits they provide to consumers and use its exemption authority to help limit burdens on credit unions,” wrote Mesack. “Unfortunately, this has not been the case.”
‘Mischaracterization and Attack’
In addition, Mesack outlined what NAFCU called the CFPB’s “mischaracterization and attack” on certain financial services fees as “junk fees,” calling it the most recent example of regulatory overreach by the Bureau. He further argued that the required disclosures of financial fees have made significant positive impacts on consumers’ understanding of financial product pricing, provided for better comparison shopping, and improved consumer repayment behavior.
“Ironically, this example of regulatory overreach is also one that undercuts the CFPB’s own efforts to help consumers by developing effective disclosures about financial products,” wrote Mesack. “Ultimately, the CFPB’s regulatory overreach as part of its war on fees could lead to serious negative economic consequences for consumers and community institutions.
CUs Urged to Contact Lawmakers
Separately, NAFCU sent a message to its members calling for outreach to lawmakers to oppose the “big box bailout bill” – the Credit Card Competition Act (CCCA) – as efforts are underway to attach it to must-pass government funding bills, the trade association reported.
As CUToday.info reports separately, the Merchants Payments Coalition said one of the bill’s primary sponsors, Sen. Roger Marshall (R-KS), has said he will attempt to get it included as part of a mini-bus bill or to the Military Construction, Veterans Affairs, and Related Agencies Appropriations Act.
“The bill, introduced in both the House and Senate, would increase the profits of big box retailers at the expense of consumers and financial institutions by creating government intervention in a free market and establish a backdoor price control on the credit card system,” NAFCU stated.