WASHINGTON – Politicians told attendees at CUNA's Governmental Affairs Conference a tale of two CFPBs Wednesday, with each story geared toward a different political leaning.
Republican Congressmen speaking to the group called for a reigning in of the bureau. Rep. Randy Neugebauer (R-Texas) said the House Financial Services Committee is working on solutions to reform aspects of the Dodd-Frank Act, including the CFPB. The Dodd-Frank Act, he said, "threw a blanket" over the industry and that credit unions "fell under that blanket."
He explained that one of the fixes to the Dodd-Frank Act was the passage of privacy notices as part of the FAST Act. Additionally, he called for a "bigger lift" on repairing what he said was a broken legislation. One of the changes he recommended was for additional cybersecurity legislation aimed at the payment system, which is the "weakest link," he said.
Neugebauer also called for changes to the CFPB's structure.
"We cannot let one person determine which products you offer," he said.
Similarly, Rep. Ed Royce (R-Calif.) said that the CFPB's regulations, which were aimed at JPMorgan, are "not appropriate for small credit unions." To that end, he discussed signing on to a letter urging CFPB Director Richard Cordray to use the bureau's Dodd-Frank Act authority to exempt some credit unions from certain rules.
Credit unions should not be regulated out of business, he added.
While Republicans called for out-and-out changes to the CFPB's structure and rulemaking ability, Democrats cautioned against any broad sweeping changes to the agency and the Dodd-Frank Act.
Sen. Heidi Heitkemp (D-N.D.) agreed with Republicans in that the regulatory environment made "too big to fail" equate to "too small to succeed." She said the Dodd-Frank Act isn't perfect and that some of the regulatory relief – such as the privacy notice changes – aren't enough. She called upon the silent majority to come together and "get the job done."
Sen. Joe Donnelly (D-Ind.) took a nuanced approach, stating that while there is a need to make changes to certain regulations, Congress needs to make sure credit unions are not "caught in the backlash to get this right."
Speaking for the 19th time at GAC, Rep. Brad Sherman (D-Calif.) applauded some of the CFPB's actions, such as providing additional safe harbor for the TILA-RESPA implementation, and said that the regulator is getting the message that some changes are necessary.
While he did not attack the agency, he said he sees a need for overall regulatory relief, including the extension of the examination cycle by the NCUA. He called for support for bills on supplemental capital, as well as bills to assist with small job creation and further fraud prevention.
Sen. John Tester (D-Mont.) said on Tuesday that politics "got in the way" of making the Dodd-Frank Act a tool aimed at the bad actors during the financial crisis. He said it is now hard to separate legislation that potentially "loosens rules for others."
Tester called for Housing Finance Reform, stating the housing market is weighing on the recovery of the economy.
Rep. Denny Heck (D-Wash.) told attendees that the combination of the CFPB's rulemaking and the NCUA's holding of credit unions to tougher standards is part of the reason why the playing field is not level.
The final politician to speak to the group, Rep. Steve Stivers (R-Ohio), asked credit unions to persuade their members of Congress to sign onto the aforementioned letter to the CFPB.
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