WASHINGTON – Overregulation of small or less complex financial institutions is hurting consumers, costing them time and money and limiting their choice, CUNA wrote to a U.S. House subcommittee Thursday. The letter was sent for the record of a House Financial Services subcommittee on financial institutions and consumer credit hearing examining opportunities for reform in the federal financial regulatory system.
“Credit unions have long served as model participants in the financial services marketplace even by the CFPB’s own admission. The regulatory framework they operated under when the NCUA served as their single regulator provided the necessary protections for credit union members, and balanced their unique structure and mission,” the letter reads. “With proper reforms and structural changes we hope that the CFPB could better align with its stated goals and provide greater transparency and protection to credit union members.”
As the subcommittee considers changes to the regulatory structure, CUNA urged it to:
- Maintain the NCUA as an independent agency, meaning it should not be subjected to the appropriations process. CUNA believes this is essential to maintaining a separate, independent federal regulator and insurer;
- Make significant structural changes to the Consumer Financial Protection Bureau (CFPB), due to the bureau’s failure to tailor rules to credit unions, instead creating numerous regulatory burdens; and
- Increase Congressional oversight to force the CFPB to recognize that its structure is harming credit unions and the consumers who depend on them for access to financial services.
CUNA also suggested a number of reforms to the CFPB, reforms that are key points in CUNA’s pro-consumer, bipartisan Campaign for Common-Sense Regulation.
- Modernizing the bureau to include a 5-person commission;
- Clarifying the CFPB’s exemption authority under section 1022 of the Dodd-Frank Act; and
- Increasing the bureau’s supervisory threshold to $50 billion, up from the current $10 billion.
CUNA also noted its support for a bill that would exempt loans for 1- to 4-unit non-owner occupied residential dwellings from a credit union’s member business lending cap. The Credit Union Residential Loan Parity Act (H.R.389) was introduced in the House in January and a Senate version (S.836) was introduced last week.
in Legislative & Political News