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The Credit Union National Association (CUNA) is continuing its criticism of the Consumer Financial Protection Bureau (CFPB), with a new op-ed column in the influential Washington, D.C.-based media source The Hill that blasts the agency for heavy-handed regulatory oversight of credit unions.
In the op-ed, CUNA Chief Advocacy Officer Ryan Donovan repeats a recent statement by CFPB Richard Cordray that absolved credit unions of playing any role in the housing bubble and the subsequent 2008 economic meltdown, but questions whether Cordray’s agency is aware of his comments.
“Unfortunately, instead of zeroing in on those in the marketplace who caused the financial crisis, the CFPB has insisted on lumping credit unions in with those bad actors and continues to sweep them into rulemakings that should be aimed at unscrupulous participants in the financial marketplace,” Donovan wrote. “The Bureau’s broadsword approach to rulemaking has a tragic consequence: the very consumers it seeks to protect are harmed because financial services offered by credit unions could become more expensive and less available. The CFPB’s rules have created an overwhelming regulatory burden that has prompted some credit unions to stop offering certain services, leaving members with no choice but to turn to less reputable providers, or even predators in the marketplace.”
Donovan pointedly argued that Cordray was not entitled to “his own set of facts” in regard to the impact of CFPB regulations on credit unions, particularly in regard to home loans.
“Just take a look at the recently finalized Home Mortgage Disclosure Act (HMDA) rule that nearly triples the amount of new data fields that must be collected–far beyond what is required by statute,” he continued. “This will be extremely damaging for credit unions, especially given that nearly half of all credit union loans are mortgage-related. This regulation will unquestionably force some smaller institutions out of the marketplace, decrease consumer choice, and limit affordable options for millions of consumers.”
Donovan sharply added that the CFPB was straying beyond its Dodd-Frank Act parameters and consumer would benefit from this situation.
“Consumers deserve a CFPB that–as the law requires–takes into consideration the impact its rules will have on their ability to access credit and–as the law specifically allows–exempts credit unions from rules designed to reign in the abusers of consumers,” he said. “If the Bureau doesn’t do this, the only financial services providers left standing will be the ones Director Cordray has recognized as having caused the financial crisis. Once again, credit unions are here sounding the alarm. We can only hope that this time, someone is listening.”
The op-ed in The Hill is the latest public criticism that CUNA leveled against the CFPB. Over the past month, CUNA has challenged the agency on HMDA data collecting and whether the CFPB is meeting its goals of serving the needs of consumers. Last March, CUNA joined several trade associations in voicing support for proposed congressional legislation that would replace the office of the CFPB director with a bipartisan commission.