Credit unions had better be ready next year to storm Capitol Hill in support of legislation that would exempt their institutions from many CFPB rules, lawmakers told attendees at NAFCU's Congressional Caucus.
Credit unions appear to be in a particularly good position to make that case in light of the scandal at Wells Fargo, where employees opened some two million accounts in order to meet quotas, they said.
"You have an unbreakable trust," Sen. Joe Donnelly (D-Ind.) told attendees of the Washington gathering.
Credit unions should use that trust to their advantage, conference speakers said.
"Mobilize your members and you will get what you need from Washington," Rep. Brad Sherman (D-Calif.) said at the conference.
NAFCU President/CEO Dan Berger urged credit unions not to be shy.
"Go to Capitol Hill and tell your story," he said. "You have trust. You can't buy that trust."
Members of Congress from both parties pledged their support for legislation that would exempt credit unions from some CFPB rules. Senators and House members this year wrote letters to CFPB Director Richard Cordray asking him to implement that exemption. Donnelly said 70 senators signed that letter, adding, "You don't get 70 senators on a lot of things."
Lawmakers said Cordray responded by saying that his agency had limited power under federal law to take such action.
Donnelly is a member of the Senate Banking Committee, which held hearings on the Wells Fargo debacle. Some Democrats used the opportunity to stress the need for an agency such as the CFPB that investigates financial abuses on behalf of consumers.
"The Dodd-Frank Wall Street Reform and Consumer Protection Act provides the CFPB with the authority to take action against institutions engaged in practices that violate consumer financial laws, including those practices that are unfair, deceptive or abusive," Senate Banking Committee ranking Democrat Sherrod Brown (D-Ohio) said in a letter to Banking Committee Chairman Richard Shelby (R-Ala.). "[The] announcement is yet another indication that the CFPB is making consumer financial markets safer for consumers and protecting hard-working American families from abusive financial practices."
The CFPB has fined Wells Fargo $100 million for the widespread use of phony accounts. Some Republicans have criticized the agency, contending that it took too long to uncover the Wells Fargo scandal.
The agency is likely to be riding high as a result of the Wells Fargo probe, which has gained nationwide attention, Sen. Ben Sasse (R-Neb.) said. "That means that efforts to abolish the agency — as some conservatives and credit unions would like — are doomed to failure," according to Sasse.
"The CFPB is not going to be reined in anytime soon," he said, although he denounced the CFPB as government on autopilot.
Berger said people will say, "This is why we have to have the CFPB." He added, "It's going to kind of slow everything down."
This means that any changes will have to be incremental, and lawmakers said those incremental changes should include exempting credit unions from CFPB regulations.
Republicans have attempted to do that this Congress, but in some cases, those efforts were part of larger, more comprehensive changes that many Democrats said they could not accept. Democrats pledged to work with Republicans to try to provide credit unions with some regulatory relief from the CFPB.
For instance, Rep. Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee, said that if legislation is needed to provide that relief, she will sponsor it.
"I want you to have everything you need," she told those attending the NAFCU conference.
Donnelly also pledged his support for the effort. "Next term, we'll be back at it again," Donnelly said.
Those efforts cannot be part of a large-scale repeal of Dodd-Frank, one Democrat warned.
"Dodd-Frank is not perfect, but we don't need to throw the baby out with the bath water," said Rep. Joyce Beatty (D-Ohio).
Rep. Denny Heck (D-Wash.) also called for a bipartisan effort on behalf of credit unions. "There are some things we can do without abandoning the things we believe in," he said. "We kept reaching high and as a [result] we got nothing."
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