(From the Credit Union Times) – In letters to House and Senate Committees, CUNA and 50 credit union leagues argued the CFPB is not fulfilling its mission “to make consumer financial markets work for consumers” because its leadership isn’t taking the time to hear concerns or priorities from credit unions and other financial institutions that are targets of the Bureau’s rulemaking.
The letters sent on Tuesday to the House Committee on Financial Services and the Senate Committee on Banking, Housing and Urban Affairs noted the bureau should engage with credit union stakeholders to better tailor its rulemaking and supervision.
“Open and transparent rulemaking is a key part of administrative process, but throughout the history of the CFPB, regulated entities and consumers have been subject to midnight press releases of upcoming rules; rulemaking based on incomplete data; and enforcement actions based on broad authority,” the letter read. “In addition, the CFPB has tried to influence market behaviors in lieu of formal rulemaking. Credit unions support the CFPB protecting consumers and going after bad actors, but overall, we need stability in the marketplace to have the resources necessary to serve our members and innovate. We are concerned we are going down a road that will disrupt more than it will protect.”
Credit union arguments against the CFPB are not new, but Tuesday’s joint letter argued that ineffective rulemaking by the CFPB is undermining the financial system and consumers it is supposed to protect.
“We remain concerned that the Bureau, throughout its history, has not effectively tailored its regulation to account for the disproportionate impact that one-size-fit-all rules have on financial cooperatives, such as credit unions and others smaller entities. Congress conveyed the Bureau substantial authority to exempt classes of entities from overly burdensome rules, and to date, the Bureau under Republican and Democratic leadership has not fully exercised this authority. This contributes to the rapid consolidation of depository institutions, undermining consumers of access and choice in the market,” the letter read.
The leagues and CUNA also stated there is a need for a renewed call for Congress to re-examine the Bureau’s structure and to pass legislation to establish a multi-member bipartisan commission.
“The concept of such a commission has enjoyed support from Democrats and Republicans throughout the Bureau’s history and preferable to the current structure that subjects the Bureau’s rulemaking, supervision and enforcement activities to the political winds,” the letter stated.
“A commission would enhance consumer protection by ensuring that diverse perspectives are considered prior to finalizing rules and prevent disruptions caused by leadership changes. Credit union members and other consumers would benefit from transparent policymaking that includes more voices. This structure is consistent with the traditions of our democracy and would provide certainty that is essential for consumers and the financial services industry, regardless of which political party controls the White House.”