With the future of the Consumer Financial Protection Bureau up in the air now that Director Richard Cordray will step down by the end of the month, the National Association of Federally-Insured Credit Unions took the opportunity to reiterate a message they have long stressed: credit unions over regulated.

NAFCU Senior Regulatory Affairs Counsel Michael Emancipator sent a letter to the bureau on Friday that outlined nine areas in which the CFPB could improve its operations and provide some relief to credit unions. The letter is a response to the bureau's 2018-2022 Strategic Plan.

Cordray is one of the last Democrats sitting in a president-appointed position in Washington under the current Trump administration. As a result, his departure will likely result in President Donald Trump nominating a Republican to come in and significantly overhaul the bureau. Right now, it’s rumored that Trump will tap Mick Mulvaney, who currently serves as director of the Office of Management and Budget, to be the interim director of the CFPB.

And with the incoming leadership, NAFCU believes the CFPB should establish a regulatory reform Task Force and adopt a regulatory reform agenda, pursuant to President Trump's Executive Order 13777, "Enforcing the Regulatory Reform Agenda."  

Since the CFPB is an independent agency, it’s not technically required to follow Trump’s executive order, but it could opt to follow the spirit of the order — a path that Cordray didn't elect to take.

NAFCU asked the CFPB to evaluate all its existing regulations to identify which should be repealed, replaced or modified. While NAFCU has a number of concerns with several bureau rules, the letter listed a summary of the most impactful on credit unions.

Here are the nine areas of possible improvement:

  • 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 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

The letter added that since the enactment of the Dodd-Frank Act, more than 1,500 federally-insured credit unions have been forced to close their doors or merge with other credit unions. This amount represents more than 20% of the industry, and this rate of loss has only increased since the creation of the CFPB.