NCUA Signs Cooperation Agreement With CFPB, but Won’t Release Document

The NCUA and the CFPB have signed a memorandum of understanding (MOU) to better coordinate the consumer protection supervision of credit unions with more than $10 billion in assets.

Under the Dodd-Frank Act, those are the credit unions over which the CFPB has direct consumer protection supervisory powers.

Under the agreement, the text of which the agency is refusing to release without a Freedom of Information Act request, the two agencies will share drafts of Covered Reports of Examination and final Reports of Examination. In addition, CFPB and NCUA officials will hold semi-annual strategy planning sessions to better coordinate their efforts.

“The MOU will better facilitate coordinated examinations to reduce redundancy and unnecessary overlap,” the agencies said in announcing the MOU.

Credit union trade groups have long said that the NCUA should be the sole regulator for federally-insured credit unions. In 2017, then-NCUA Chairman J. Mark McWatters sent a letter to then-CFPB Director Richard Cordray asking the CFPB to cede consumer protection supervision of large credit unions to the NCUA.

But while the two agencies described this week’s memorandum in general terms, the NCUA refused to release the text of the agreement, while the CFPB did not respond to a request for the text. The NCUA has requested that a Freedom of Information Act request be filed to obtain the text or a redacted version of the MOU.

Past MOUs between the CFPB and other federal agencies have been made public. For instance, in February, the agency and the Department of Education renewed a high-profile agreement dealing with student loans. The CFPB also has an MOU with the Federal Trade Commission; that document also is public.

Sources familiar with the agency said the MOU remains in effect even though CFPB Director Kathleen Kraninger is likely to be replaced by President-elect Joe Biden and NCUA Chairman Rodney Hood is likely to be replaced as chairman. A new CFPB director or NCUA chair could choose to void the agreement.

“This agreement underscores (the) NCUA’s commitment to consumer protection by facilitating vital information sharing between the agencies for credit unions over $10 billion dollars in assets,” Hood said in a statement. “Improved coordination with (the) CFPB will produce better outcomes in support of consumers and reduce burden on covered institutions.”

“Today’s MOU is an important step toward improving our existing framework and increasing opportunities for collaboration between our agencies,” Kraninger said. “By working in a collaborative way, we will engage in more effective processes to protect consumers in the financial marketplace. We look forward to our continued partnership with the NCUA.”