ICBA Endorses Harper’s Consumer Protection Proposal
ICBA's leader says, in part, "it stands to reason that the NCUA’s oversight of the industry should not remain static" when it comes to consumer protection efforts.
The NCUA neglects its consumer protection responsibilities, the Independent Community Bankers of America said this week, as the trade group endorsed NCUA board member Todd Harper’s plan to focus more attention on the issue.
“While protecting taxpayers from losses to the Share Insurance Fund should certainly be a priority of the NCUA, the protection of consumers should not be so severely relegated,” ICBA President/CEO Rebeca Romero Rainey said in a letter to the NCUA commenting on the agency’s proposed 2020 budget.
The most recent examiner time survey reported that agency examiners spent 12% of their time on non-insurance compliance issues, she said.
Harper has proposed hiring three employees to develop a dedicated consumer protection compliance exam process for large, complex credit unions.
Harper has said that other federal banking regulators have such tests. He also has said that the NCUA’s policy also differs from the congressionally mandated Federal Financial Institutions Examination Council. That council aims to develop uniform standards for financial regulators.
Rainey said that the banking agencies dedicate “significant resources” to consumer protection.
For instance, she said, the FDIC’s program focuses on a bank’s activities that pose the greatest risk to consumers.
She said that despite growth in the industry and changes to NCUA rules, the agency is not keeping up with other banking regulators’ consumer protection efforts.
“Though an increase in membership and consumer complaints might not directly correlate to fair lending violations, it stands to reason that the NCUA’s oversight of the industry should not remain static in the face of these substantial increases,” she wrote.
It remains unclear whether Harper’s proposal will be added to the agency’s budget. The NCUA board is expected to adopt the budget on Dec. 12 and neither of Harper’s fellow board members have commented on the plan.
CUNA, in commenting on the budget proposal, said the consumer protection plan is not needed.