A New Era at the CFPB Brings New Opportunities

CUNA, credit union leagues and credit unions congratulate Kathy Kraninger on her confirmation to lead the Consumer Financial Protection Bureau. After more than a year of uncertainty over the bureau’s leadership, the financial services marketplace looks forward to much needed stability at one of its primary regulators.

This new era at the bureau brings exciting opportunities, both for consumers and the financial institutions that serve them.

As Americans’ best financial partner, credit unions look forward to continuing our exemplary member service history, and offer several suggestions for the future of the bureau to allow credit unions to increase member service. We trust Director Kraninger will quickly recognize the unique structure of credit unions and the enormous benefit that credit unions provide to American consumers in need of financial services. Credit unions and the 110 million Americans they serve have high hopes for the bureau, particularly that it will focus on appropriately tailoring regulations to reduce burden or exempt credit unions entirely, as appropriate.

Previous bureau leadership was very reluctant to use the exemption authority granted to the bureau by section 1022 of the Dodd-Frank Act, allowing it to exempt “any class of covered persons, service providers or consumer financial products or services” from its rulemakings. We hope Director Kraninger will take note of this clear and unambiguous language and align the bureau with Congressional intent. Credit unions are subject to a number of rules that are inappropriate for their function and risk profile, ultimately harming consumers, yet a clear solution already exists in the statute.

The bureau was created to rein in Wall Street banks and the unregulated and under-regulated sectors of the financial services industry, not put barriers in place that prevent consumers from accessing safe and affordable financial services. By keeping its focus on these bad actors, the bureau would spend fewer resources on regulating and supervising credit unions, and more time on entities actively engaged in predatory practices that exploit consumers.  This in turn allows credit unions to focus less on compliance paperwork and devote more time and resources to their already stellar member service.

However, it is critically important for the bureau to understand that credit unions are not asking to be exempt from all its rules; instead, we ask for consideration of the credit union difference financial service providers, particularly those who have a history of abusing consumers, and to tailor certain rules accordingly.  We strongly believe this consideration would be best achieved if the bureau were run by a commission rather than a single director. Absent a commission, CUNA also urges Director Kraninger to continue Acting Director Mulvaney’s positive trend of stakeholder engagement and participation in the regulatory process. This includes preserving the Credit Union Advisory Council, using the Request for Information and Advance Notice of Proposed Rulemaking processes to solicit additional stakeholder views, and working with the Small Business Administration to ensure that the Small Business Regulatory Enforcement Fairness Act (SBREFA) process is efficient and effective.

With a newly confirmed director starting a five-year term, it’s a new era at the bureau. Director Kraninger has a golden opportunity to ensure the bureau is truly placing consumers first, and credit unions stand ready to assist.