WASHINGTON—The credit union trade associations have sent a number of letters to Congress and the BCFP, while President Trump has signed a bill dialing back BCFP rules around indirect lending.
CUNA filed a comment in response to the Bureau of Consumer Financial Protection’s Request for Information on its Supervision Program. The letter urges the Bureau to transfer examination authority for consumer protection regulations over credit unions with over $10 billion in assets to the NCUA and/or the appropriate state regulator.
“CUNA supports this change as it will enable the Bureau to fully focus its examination and enforcement efforts on Wall Street banks and other abusers of consumers, while ensuring credit unions continue to be adequately supervised by the agency most proficient with its structure and operation,” the letter reads. “In addition, this change would streamline the examination and enforcement efforts for these largest credit unions, which are subject to duel examination or even triple examination for a federally insured state chartered credit union.”
CUNA also recommended ways in which the Bureau can streamline its current examination processes. In particular, CUNA states that the Bureau should not use a “one-size-fits-all” approach to examining financial institutions under its jurisdiction, and the timing, frequency, and scope of examinations should be based on the structure, operation model, and complexity of the financial institution.
NAFCU Letter To BCFP
NAFCU, in its letter to the BCFP on its Supervision Program, reiterated that no credit unions, regardless of asset size, should be included under the Bureau's supervision and examination authority.
"NAFCU believes that the Bureau's supervision and examination authority over credit unions with more than $10 billion in total assets creates needless administrative burdens and results in a fragmented examination process," said Regulatory Affairs Counsel Andrew Morris. "As credit unions approach the $10-billion dollar threshold, compliance costs dramatically rise to accommodate the Bureau's supervisory oversight. Furthermore, the cost of getting compliance right can be extraordinarily expensive.
"At the consumer protection level, credit unions present minimal risks, and have rightfully earned their reputation as consumer-friendly institutions dedicated to improving their members' financial wellbeing," Morris added.
In addition to a detailed explanation of why credit unions should not be under the CFPB's authority, Morris suggested five changes the CFPB should consider regarding its supervisory activities, including:
- Adopting more reasonable timeframes for the collection of information and documents from supervised entities prior to the start of an exam
- Promoting a more flexible exam appeals process that would provide more relief
- Assuming more reliable mechanisms for factoring complaint data into exams
- Ensuring that updates to the Bureau's Exam Manual is accompanied by Federal Register notices and official redlines
- Favoring supervisory processes over enforcement actions, and providing entities with a more reasonable timeframe to respond to potential action and request for response letters
More NAFCU Letters
Ahead of today’s House Financial Services Committee mark-up of HR 5841, the Foreign Investment Risk Review Modernization Act of 2018, NAFCU Vice President of Legislative Affairs Brad Thaler sent a letter thanking the committee for including a provision in the bill that would delay the NCUA's risk-based capital rule from taking effect by two years, moving the implementation date from January 1, 2019 to January 1, 2021. In the letter, Thaler reiterated the association's support for the provision, since it would give credit unions more time to prepare and comply with the rule.
President and CEO Dan Berger sent a letter to House Rules Committee thanking them for scheduling Monday’s meeting on S 2155, the Economic Growth, Regulatory Relief, and Consumer Protection Act. More specifically, association Berger requested the committee advance the bill under a closed rule, in order "to avoid any amendments that could impact the future of the bill." Berger reiterated the associations' support for S 2155 as it would bring the credit union industry much needed regulatory relief.
Trump Signs Bill on Indirect Lending
Separately, President Trump has signed into law a bill that removes guidance from the Bureau of Consumer Financial Protection related to indirect lending.
As CUToday.info reported here, the “guidance” issued by the BCFP in 2013 was declared a “rule” by the GAO, allowing Congress to use the Congressional Review Act to repeal it.
“Gone are the days of a rogue Bureau using its unchecked powers to sidestep due process and harm the very consumers it is charged with protecting,” said House Financial Services Chairman Jeb Hensarling (R-TX) following the signing ceremony. “I look forward to continuing to work with President Trump, Acting Director Mulvaney, and my colleagues in Congress to ensure the Bureau, as well as all other federal regulatory agencies, are held accountable for their actions and act in a transparent manner.”