WASHINGTON – The CFPB's mission is to shield consumers from unfair financial treatment. That intent is, after all, part of the federal bureau's name.
But too often well-intended regulations punish the very people that need their protection through the creation of complex, onerous regulations that over-regulate without really understanding how those consumer needs should be met. Both credit unions and their members suffer.
Credit unions must take the time and make the effort to let their members tell CFPB, not to mention the NCUA and Congress, exactly what they're doing wrong, according to one of Tuesday's breakout sessions at GAC.
“You have lots of legislation and regulation to read through and comment on, but it's necessary for credit unions to do so,” said Dan McCue, SVP of corporate administration for $5.6 billion Alaska USA Federal Credit Union in Anchorage and moderator of the panel “Addressing Regulatory Burdens at CFPB, NCUA and in Congress.”
”You have to look at these things holistically and comment on proposed rules and get the voice of the credit union community commenting on these regulations, too,” he added
McCue's panel included Andrea Stritzke, regulatory compliance director for CUNA Mutual Group; Jared Sawyer, staff member and Chairman's Designee, for the House Financial Institutions and Consumer Credit Subcommittee; andBeth Zorc, senior counsel, Senate Banking Committee.
All participants agreed that the people charged with writing the laws must hear firsthand how badly some of those laws have made the lives of the very people they're meant to help
“We're always looking for examples and data about how regs affect you and your members on daily basis,” Sawyer said. “That's information we can take back to NCUA and CFPB and say, 'Look, we've got to find a better way of doing this.'”
Zorc agreed, applauding CUNA's past efforts of bringing such concerns to the Senate and House Banking Committees. “We need tangible examples and compelling statistics.”
Numerous audience members shared anecdotal evidence of situations in which they were unable to meet the needs of members, especially low-income members, who were unable to improve their economic situations because certain regulations required information or set standards they were too difficult to manage. Small credit unions with limited resources found their members especially hard hit by the complexity and inflexibility of some current regulations.
“What's the messaging going up to the Hill?” McCue asked. “It's that the complexity is too great and the rules get too convoluted from so many different factors. Nothing is what you think it is, and always has unintended consequences.”
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