Consumer Financial Protection Bureau building in Washington, D.C.
Credit/Diego M. Radzinschi
In a joint letter sent to CFPB Director Rohit Chopra, officials with CUNA and NAFCU once again raised their objections to the Bureau's timing and push to expand reporting requirements for credit unions under the Fair Credit Reporting Act (FCRA).
The letter, filed Monday, stated the CFPB's proposals to increase the scope of the FCRA "do not align with Congress's intent in passing the FCRA" and "the Bureau's proposals in this Outline represent an unwarranted and vast expansion of the intent and scope of the FCRA to impose additional requirements on credit unions, exposing these community-based, not-for-profit financial institutions to myriad legal and compliance risks, for supposed benefits to consumers that have yet to be quantified."
Beyond the scope of the proposed rule, CUNA and NAFCU objected to the speed at which the CFPB has moved on its proposals. In the letter, the groups asked the CFPB to hold a new Small Business Regulatory Enforcement Fairness Act (SBREFA) Panel where Small Entity Representatives (SERs), which includes credit unions, can better estimate the impact of the proposals in its FCRA rulemaking effort and the potential associated costs.
"The CFPB has skirted its statutory obligations by initiating this rulemaking with an inappropriately limited timeline that does not permit the SERs and other interested stakeholders an adequate opportunity to review the Outline and offer meaningful feedback regarding the potential impact on small entities," the letter stated. "The Bureau's Outline also lacks the necessary details for SERs to fully comment on the implications and costs of these proposals. Accordingly, the Bureau should consider convening another SBREFA Panel only after releasing a new Outline containing more data and concrete proposals."
According to CUNA and NAFCU, other arguments raised by the organizations in the letter included:
- The FCRA only requires factual issues to be resolved in disputes and legislative history shows that legal issues were not intended to be resolved by furnishers, like credit unions.
- The definition of "data broker" should be narrow to exclude depository institutions already subject to the requirements of the FCRA and should not impair credit unions' ability to obtain valuable information like credit header data.
- Credit unions should be permitted to continue using medical debt information as they see fit because this data offers an important means of confirming ability to repay.
- The CFPB should provide at least 24 months to implement any final rule so that credit unions can consult with their various business units to ensure proper compliance.
The organizations also noted the CFPB distributed the outline of the proposed rules Sept. 15, did not publish for review on its website until Sept. 21, and scheduled the first pre-SBREFA panel meeting Oct. 2.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
