Credit unions got looped in with the rest of the industry after the financial crisis, falling under the new industry watchdog dubbed the Consumer Financial Protection Bureau to ensure such extreme lending would never happen again.
The only problem is that credit unions believe they never contributed to the crisis in the first place, and yet they still have to submit to the overly burdensome regulation released in the aftermath by the bureau.
In a new op-ed in the Credit Union Journal, Dan Berger, CEO of the National Association of Federally-Insured Credit Unions, emphasized his concerns with the bureau having any rulemaking authority over credit unions.
From the blog:
The CFPB’s reach is ever expanding and CUs are forced to deal with the growing compliance burden.
Case in point: compliance deadlines for the amendments to the mortgage servicing rules, the new Home Mortgage Disclosure Act rules and the bureau’s final rule on prepaid accounts all converge this fall.
All these current and pending rules are why NAFCU has been locked in a fight with the CFPB over how it should not be regulating the credit union industry.
No one—especially not a government bureau—knows the individual financial needs of members better than the credit unions that serve them. NAFCU will continue this fight – with no compromise—so credit unions can continue to operate in the upright manner they always have for their 106 million members.
However, this isn’t a new cry from NAFCU, and in the past, the bureau publicly stated it disagrees, even going as far as to say credit unions are benefitting from the new rules.
For example, in March of last year before the Housing Financial Services Committee in Cordray’s semi-annual update, Cordray used credit unions as an example of a clear benefactor to the CFPB’s regulation.
And yet right before the update, Berger sent a letter to House Financial Services Committee Chairman Jeb Hensarling, R-Texas, saying, "Unfortunately, many of our concerns about the increased regulatory burdens that credit unions would face under the CFPB have proven true."
Ultimately, Berger urged the bureau in the op-ed to use its exemption authority under Section 1022(b)(3)(A) of the Dodd-Frank Act to exempt credit unions from the bureau’s rulemakings.