Creating the Consumer Financial Protection Agency is bad policy; carving out for smaller institutions is even worse. The CFPA, as noted by numerous (and I might add Republican) members of Congress at NAFCU's Congressional Caucus, would separate consumer protections from safety and soundness. This is exactly what led to the demise of Fannie Mae and Freddie Mac.

Consumer protections are crucial. No one wants their dear old grandmother getting taken to the cleaners with some unscrupulous reverse mortgage. At the same time, for the good of all, consumer protections cannot take away from safety and soundness, or there won't be any financial institutions to protect consumers from.

As of press time, credit union trades were following debate in the House Financial Services Committee on the CFPA. Two members of Congress introduced an amendment to the bill to exempt credit unions with less than $1.5 billion in assets and banks with less than $10 million from the purview of the CFPA. This is very bad.