Trade Group Pushes for NCUA’s Independence & Regulatory Pause at CFPB

In two letters distributed Tuesday, America’s Credit Unions pushed for the continued independence of the NCUA, outlined recommendations for the CFPB – whose future is currently in limbo – and encouraged the Small Business Administration to embrace credit unions as key partners to American small businesses.

In the first letter, addressed to the Office of Management and Budget’s (OMB) Mark Calabria – who served as Federal Housing Finance Administration director in the first Trump administration and was named OMB associate director for treasury, housing, and commerce last week – America’s Credit Unions President/CEO Jim Nussle wrote, “The NCUA’s independence allows it to make unbiased decisions that prioritize the safety and soundness of credit unions without undue influence from political or external pressures. This autonomy ensures that regulatory actions are based on sound financial principles and the best interests of credit union members, rather than short-term political considerations. Furthermore, the NCUA’s funding structure – supported by credit unions and their members, not taxpayers – reinforces its ability to operate independently and effectively.”

Last week, President Trump issued an Executive Order giving his administration control over independent federal regulators, including the NCUA. The move resulted in mixed reactions from credit union industry leaders.

Nussle also outlined the following recommendations for the CFPB in his letter to Calabria:

A regulatory pause and review at that considers lawfulness, costs and benefits of the bureau’s overdraft and medical debt final rules, as well as data broker, coerced debt, electronic funds transfers and contract clause ban proposals;
Return the CFPB to its original mission of addressing reckless lending practices of bad actors and unregulated non-bank lenders while recognizing credit unions’ value;
Use its legal authority to exempt credit unions from regulations aimed at addressing misconduct by other industry bad actors;
Adopt the principles of the recent executive order requiring a detailed assessment of rules with an annual impact of $100 million or more; and
Address persistent concerns about its reliance on vague statutory authorities, especially its unfair, deceptive, or abusive acts or practices (UDAAP) standard.

The Trump administration shut down the CFPB and fired Director Rohit Chopra on Feb. 1, leaving the bureau’s future in limbo. This Thursday, the Senate Banking Committee will consider the nomination of Jonathan McKernan, a former FDIC board director, to serve as the next director of the CFPB.

Last Thursday, the credit union industry learned that the CFPB’s Credit Union Advisory Council (CUAC) had been disbanded.

In a compliance blog posted Tuesday, America’s Credit Unions stated, “We understand our members are concerned about the executive actions of our new administration. Most of these questions concern the regulatory obligations of credit unions now that the future state of the Consumer Financial Protection Bureau (CFPB) is up in the air.” The blog then went on to explain the recent actions taken by the administration that have impacted the CFPB and how those actions might affect credit unions.

In his second letter distributed Tuesday, this one addressed to newly-confirmed SBA Administrator Kelly Loeffler, Nussle argued that credit unions’ focus on small business is a key part of Main Street success and made several recommendations for the SBA:

Expand credit union participation in SBA lending programs;
Safeguard SBA programs from risks presented by fintechs; and
Oppose initiatives to allow the SBA to become a direct lender and instead strengthen partnerships with community financial institutions.

“Credit unions are uniquely positioned to advance the SBA’s goals, particularly in areas where larger financial institutions have been less effective in meeting the needs of small businesses. As not-for-profit, member-owned financial institutions, credit unions prioritize the financial well-being of their members and their communities,” Nussle wrote. “Profits are reinvested in the form of reduced fees, better loan rates and enhanced services. This structure enables credit unions to serve as a vital conduit of affordable credit for small businesses, especially in rural areas and underserved urban markets.”

READ MORE: Nussle’s letters to Office of Management and Budget Associate Director Mark Calabria and SBA Administrator Kelly Loeffler.

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Natasha Chilingerian has been immersed in the credit union industry for over a decade. She first joined CU Times in 2011 as a freelance writer, and following a two-year hiatus from 2013-2015, during which time she served as a communications specialist for Xceed Financial Credit Union (now Kinecta Federal Credit Union), she re-joined the CU Times team full-time as managing editor. She was promoted to executive editor in 2019. In the earlier days of her career, Chilingerian focused on news and lifestyle journalism, serving as a writer and editor for numerous regional publications in Oregon, Louisiana, South Carolina and the San Francisco Bay Area. In addition, she holds experience in marketing copywriting for companies in the finance and technology space. At CU Times, she covers People and Community news, cybersecurity, fintech partnerships, marketing, workplace culture, leadership, DEI, branch strategies, digital banking and more. She currently works remotely and splits her time between Southern California and Portland, Ore.