Credit union (CU) and bank trade groups are locked in another battle, this time arguing about oversight by the Consumer Financial Protection Bureau (CFPB).
Jim Nussle, president and CEO of the Credit Union National Association (CUNA), recently requested that all CU supervision be handled by the National Credit Union Administration (NCUA). While only nine credit unions meet the $10 billion asset requirement for CFPB supervision, Nussle explained in a letter that the agency should focus its regulatory efforts on banks, especially since less than 1 percent of all consumer complaints have involved credit unions.
“The credit union industry is not small, special or immune to the consumer risks [that the CFPB] is charged by Congress to address,” the bank trades wrote, according to American Banker.
The letter added that more than 300 CUs hold assets of $1 billion or more, and, in total, are larger than 88 percent of U.S. banks. In addition, the nine CUs currently under CFPB supervision are all in the top 1 percent of depository institutions. With that in mind, the two bank groups believe the NCUA cannot adequately supervise these large credit unions, due to reports from the agency’s own inspector general and the U.S. Government Accountability Office (GAO) that were “sharply critical of the adequacy of NCUA supervisory procedures, and the competency of NCUA examiners.”
The National Association of Federally-Insured Credit Unions (NAFCU) responded on Tuesday (May 7), with President and CEO Dan Berger pointing to billions of dollars in fines that the CFPB has hit big banks with since its launch.
“It is not surprising that the trade associations that represent entities such as Wells Fargo would want the CFPB preoccupied with examining credit unions, while their member banks have continued to abuse consumers even after the enactment of the Dodd-Frank Act,” Berger wrote, adding that “if the ABA and CBA truly had consumer protection in mind, they would focus on preventing consumer abuses by their members instead of targeting member-owned, not-for-profit credit unions.”