Consumer Financial Protection Bureau headquarters in Washington, D.C. Photo: Diego M. Radzinschi/ALM
America’s Credit Unions is pushing back against the CFPB's proposed changes to Regulation E and the Electronic Fund Transfer Act (EFTA), particularly as they relate to stablecoins and digital payment systems. In a recent letter to CFPB Acting Director Russell Vought, the organization raised concerns over the agency’s use of an interpretive rule to make substantive regulatory changes.
“Altering the balance of responsibility established under EFTA by requiring credit unions to absorb a greater share of financial losses does not make the financial sector safer or more secure; instead, it enables further exploitation of the law to further fraudulent schemes,” Andrew Morris, director of innovation and technology at America’s Credit Unions, wrote.
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The letter, dated March 31, challenged the CFPB’s approach of implementing sweeping changes through an interpretive rule rather than formal rulemaking; a process that includes public comment and broader industry input.
“While we are appreciative of interpretative changes which ensure nonbanks who provide consumer financial services comparable to those of credit unions and banks are held to equivalent standards and supervisory expectations, an interpretive rule is not the appropriate vehicle for expanding the reach of Regulation E,” Morris stated. “Fundamentally, a formal rulemaking will ensure a broader range of perspectives, and a more fully developed understanding of any unintended consequences that the changes could pose upon the financial industry and the stability of the dollar.”
Key takeaways from the letter included the following:
- Credit unions oppose being held financially liable for unauthorized transactions under expanded Regulation E interpretations.
- The CFPB’s interpretive rule circumvents proper rulemaking procedures, limiting transparency and stakeholder input.
- Any regulation addressing digital payments and stablecoins must include formal rulemaking to ensure industry stability and fairness.
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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.
