In letters to House and Senate committees, the CUNA and 50 credit union leagues argued that the CFPB was not fulfilling its mission “to make consumer financial markets work for consumers” because its leaders do not take the time to hear the concerns or priorities of credit unions and other financial institutions that are the target of the bureau’s regulation.
Letters sent Tuesday to the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee noted that the office should engage with credit union stakeholders to better tailor its regulation and policy. monitoring.
“Open and transparent rulemaking is a key part of the administrative process, but throughout CFPB’s history, regulated entities and consumers have been subjected to midnight press releases about upcoming rules; developing rules based on incomplete data; and enforcement action based on broad authority,” the letter read. “Furthermore, the CFPB has attempted to influence market behaviors instead of making formal rules. Credit unions support the CFPB to protect consumers and prosecute bad actors, but overall we need market stability to have the resources to serve our members and innovate. We fear taking a path that will disrupt more than it protects. »
Credit unions’ arguments against the CFPB are not new, but Tuesday’s joint letter argued that the CFPB’s ineffective rulemaking undermines the financial system and the consumers it is meant to protect.
“We remain concerned that the Bureau, throughout its history, has not effectively adapted its regulations to take into account the disproportionate impact that uniform rules have on financial cooperatives, such as credit unions and other smaller entities. Congress has given the Bureau substantial authority to exempt classes of entities from overly burdensome rules, and to date, the Republican- and Democratic-led Bureau has not fully exercised that authority. This contributes to the rapid consolidation of depository institutions, undermining consumer access and choice in the marketplace,” the letter read.
The leagues and CUNA also said it was necessary to renew the call for Congress to reconsider the structure of the office and pass legislation to establish a bipartisan, multi-member commission.
“The concept of such a commission has enjoyed the support of Democrats and Republicans throughout the Bureau’s history and is preferable to the current structure that subjects the rule-making, oversight and enforcement activities of the Bureau aux vents politiques,” the letter read.
“A commission would strengthen consumer protection by ensuring that various perspectives are considered before finalizing the rules and by preventing disruption caused by changes in management. 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 essential certainty to consumers and the financial services industry, regardless of which political party controls the White House.