WASHINGTON—As the CFPB prepares for a new director – following Director Richard Cordray's announcement that he will step down from the post before the end of the month – both CUNA and NAFCU are recommending the Bureau take advantage of the transition and implement a new approach to its rulemaking and enforcement.
In a letter to the CFPB, NAFCU Senior Regulatory Affairs Counsel Michael Emancipator outlined nine areas in which the Bureau could improve its operations and provide some relief to credit unions. Emancipator was writing in regard to the Bureau's 2018-2022 Strategic Plan.
Since Dodd-Frank was enacted, more than 1,500 federally insured credit unions have closed or merged with other credit unions due to increasing rules and compliance costs, Emancipator wrote. Therefore, NAFCU continues to urge the CFPB to provide regulatory relief – especially for small entities that cannot afford additional compliance costs – and increased transparency and clarity in rulemakings to limit compliance confusion.
To provide credit unions with regulatory relief, NAFCU recommends that the CFPB:
- Increase its use of exemption authority
- Provide clarification around unfair, deceptive or abusive acts and practices (UDAAP)
- Take a cautious approach to any potential first-party debt collection rule
- Revise the definition of qualified mortgage
- Make changes to the mortgage servicing rule to allow more flexibility
- Improve its Consumer Complaint Database to verify claims before a credit union's reputation is unfairly tarnished
- Expand the threshold related to its remittance rule
- Limit changes to and provide exemptions from Home Mortgage Disclosure Act (HMDA) reporting
- Not proceed with overdraft regulations that would impede credit unions' programs already in place
Emancipator notes that this regulatory reform agenda would align with President Donald Trump's executive orders to identify possible regulations to repeal, replace or modify.
CUNA, meanwhile, said it plans to send a letter to whomever President Trump appoints as interim director urging that person take several steps.
Specifically, CUNA wants the interim director to stop the pending rulemaking, impose a moratorium on rulemaking, reexamine the rules currently in the pipeline, and take a look back at the last six years of rulemaking.
“The one-size-fits-all rules don’t work,” said CUNA Chief Advocacy Officer Ryan Donovan. “The big banks can afford to not even comply with the rules. The rules need to be tailored so credit unions can serve their members.”
Donovan said CUNA is also calling on the interim director to reexamine its exemption authority. “Congress gave the CFPB broad authority to create exemptions in its rulemakings,” said Donovan, noting 400 members of Congress in 2016 sent a letter to the agency urging it to better use its exemption authority.
“The focus needs to be on Wall Street and getting out of the way of Main Street,” said Donovan.