The CFPB is an independent agency housed inside the Federal Reserve that was established by the Dodd-Frank financial overhaul bill that Congress passed in 2010. It has direct supervisory authority over financial institutions with assets of more than $10 billion though all financial institutions must comply with its regulations. Only Navy Federal FCU, State Employees of North Carolina CU and Pentagon FCU fall into that category.

Cordray, a former Ohio attorney general, has headed the CFPB’s enforcement efforts since last January.

CUNA President/CEO Bill Cheney issued a statement saying that his group has “has met with Mr. Cordray at the Consumer Financial Protection Bureau and the Ohio League has developed a strong, professional relationship with him. The fact that the agency now has a director holds ramifications for credit unions, other financial institutions and financial service providers that have been unregulated at the federal level before now.”

NAFCU President/CEO Fred Becker said in an interview that his group “looks forward to working with Mr. Cordray. Those credit unions that have worked with him have found him reasonable and someone who understands the credit union industry.”

By having a permanent director in place, the CFPB will be able to regulate mortgage companies, payday lenders, debt collectors and other financial companies. It will also be able to write new regulations that identify “unfair, deceptive or abusive acts or practices” by any party offering a consumer financial product or service. Previously, the agency could only revise existing regulations.

The bureau also now has the ability to adopt model disclosures for any financial product or service. It also has the power to determine which entities are larger participants in markets for other consumer financial products and, thus, subject to the supervision and examination.

Credit unions have expressed concern about the increased regulatory burden they may face because of new rules from the CFPB.

“With the bureau, those who didn’t cause the crisis are facing more regulation. But those entities that did cause it don’t have more of a compliance burden,” said NAFCU’s Becker.

But the additional powers that the CFPB has now that it has a permanent director could help credit unions.

Wright-Patt Credit Union President/CEO Douglas Fecher told a Senate panel last year that his credit union was at a disadvantage because until the CFPB has a permanent director, it is forbidden by law to regulate payday lenders and pawn shops. While credit unions are the most heavily regulated financial institution his competitors aren’t and this creates an uneven playing field, said Fecher, whose $2.1 billion credit union is based in Fairborn, Ohio.

The Senate Republicans said they opposed the confirmation among any director of the CFPB until Senate Democrats and President Obama agreed to structural changes to the bureau, including replacing the single director with a five-member board.

Last July, along mostly party line vote of 241-173, the GOP-controlled House approved a measure to have the bureau run by a five-member board rather than a director; allow the bureau’s decisions to be overturned by a majority vote of the Financial Stability Oversight Council rather than two-thirds as currently required; and delay some of the CFPB’s operations until it has a confirmed director in place.

The Democratic-controlled Senate hasn’t taken up the measure.