Commentary published on Wednesday (March 16) by National Association of Federal Credit Unions (NAFCU) President and CEO Dan Berger may signal a contentious debate over assertions by the Consumer Financial Protection Bureau (and Director Richard Cordray) that the CFPB does not need to make a greater effort to exempt credit unions from regulations.
In his commentary, Berger said: “NAFCU and our members must challenge CFPB Director Cordray’s assertion that Congress did not intend to grant credit unions a blanket exemption, and that is why the bureau is not doing more to provide relief. Congress gave CFPB authority in Section 1022 to grant exemptions on a rule-by-rule basis. Unfortunately, the CFPB has failed to exercise this broad legal authority, as we believe Congress intended, to allow credit unions to be exempted from certain rules.”
The NAFCU executive also said that, contrary to CFPB assertions, there has indeed been an impact of regulations, which includes the fact that credit unions have been scaling back on services or, in other cases, have had to merge or cease operations altogether.
Cordray’s response, delivered as part of his organization’s semi-annual report to Congress, was that the industry itself has seen membership reach all-time highs and that that’s “not consistent with this notion that we’re killing credit unions.” Cordray maintained that credit unions can be rewarded in “a marketplace that rewards responsible lenders.”
Cordray also stated that U.S. lawmakers did not explicitly leave credit unions out of the jurisdiction of Dodd-Frank.
Cordray said in his testimony that the “hold harmless period” tied to the Truth in Lending Act/Real Estate Settlement Procedures Act mortgage disclose rule “will remain open-ended due to unforeseen information technology problems,” according to a NAFCU release. Rules that are likely to come this year will touch on new avenues, including prepaid products and mortgage services.