CUNA: CFPB decisions ‘terribly troubling,’ ‘baffling’

In a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray following meetings with CFPB officials and staff, the Credit Union National Association (CUNA) blasted the bureau for not considering credit union carve-outs from recent proposed rulemaking on arbitration and small-dollar loans.

The letter comes after recent meetings between the bureau staff and CUNA, state credit union leagues and credit unions. The credit union industry made its case for carve-outs from proposed rules for credit unions, joining with hundreds of Democrats and Republicans in Congress who have written the bureau to use its statutory exemption authority under Section 1022 to provide relief to credit unions.

However, according to CUNA, the bureau has indicated it has “no intention to and does not believe it has to use the exemption authority to tailor its regulations toward the abusers of consumers, despite the overwhelming message from Congress.”

CUNA called the bureau’s rejection of the idea, and the message from Congress, “terribly troubling.”

“We believe that Congress was very clear in the enactment of the Dodd-Frank Act that the bureau has the ability to exempt any class of entity from its rulemaking. Where there is no evidence of harm to or abuse of consumers, the bureau should exercise this authority so that providers that have been serving consumers in a safe and affordable manner can continue to do so efficiently,” CUNA wrote.

CUNA strongly urged the bureau to change its stance, citing the industry’s regulatory burden as rising from $4.4 billion in 2010 to $7.2 billion in 2014.

“The bureau’s resistance to the plain language of the statute and the subsequent bipartisan message of more than three-quarters of the elected representatives in the federal government is baffling and disrespects the consumers who elected the Congress,” it wrote. “We strongly encourage the bureau to reconsider its perspective on Section 1022 and finalize rules that allow credit unions to continue to offer services to consumers under the current regulatory scheme.

“With every rulemaking that ignores the statutory and congressional message, the bureau makes it harder for credit unions to fulfill their mission.”

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