CU Trades Fine With CFPB Backing Down From MLA Supervision
Taking a “step back” from MLA oversight would halt duplicative examinations since the NCUA already supervises MLA compliance.
The comments came amid reports that the CFPB intends to exclude MLA from its examination of financial institutions because agency officials believe the bureau lacks the authority to include MLA.
Under former Director Richard Cordray, the bureau was particularly aggressive in its enforcement of the MLA, with Holly Petraeus, heading the Office of Servicemember Affairs.
However, under Acting Director Mick Mulvaney, agency officials have been rolling back enforcement, saying that the agency lacks authority in many areas.
“Under new leadership, the bureau has engaged in a comprehensive review of its activities and is assessing whether those activities align with its statutory authority,” said CFPB spokesman John Czwartacki. “MLA is one authority, among many, that the Bureau has examined. The bureau expects to convey its findings to Congress and to seek legislative clarity where warranted.”
Taking a “step back” from MLA oversight would halt duplicative examinations, since the NCUA already supervises MLA compliance, said NAFCU Executive Vice President of Government Affairs and General Counsel Carrie Hunt.
She said, however, that credit unions are committed to protecting servicemembers and their families from exploitation.
“We must ensure payday lenders, fly-by-night entities and other bad marketplace actors are not able to dodge regulations designed to protect our nation’s servicemembers,” she said.
The CFPB should not be supervising credit union activities at all, said CUNA Chief Advocacy Officer Ryan Donovan, in renewing the organization’s call to delegate supervision of the largest credit unions to the NCUA.
“While the MLA rule is imperfect and needs revision, credit unions support protecting servicemembers and their dependents from the predatory practices of payday lenders and the Wall Street banks,” he said. “Those unscrupulous entities need to be held accountable through robust, proactive supervision and examination process.
House members in the past have called on the CFPB to exempt credit unions and other highly regulated financial institutions from MLA and other enforcement.
But following the news that the CFPB may abandon MLA enforcement, Democratic senators wrote Mulvaney asking him not to back down from enforcement.
In their letter, the 49 Democrats said that the CFPB absolutely does have the authority to conduct routine examinations in connection with the MLA.
‘The CFPB should not be abandoning its duty to protect our servicemembers and their families, and we seek your commitment that you will utilize all of the authorities available to the CFPB to ensure that servicemembers and their families continue to receive all of their MLA protections,” they wrote to Mulvaney.
They added that CFPB examinations and the Office of Servicemember Affairs are critical in ensuring the detection of risks to military consumers.