CUNA, NAFCU Support Bill to Exclude Many Financial Institutions From CFPB Rules
The House Financial Services Committee, on Jan. 17, will consider legislation that would exempt financial institutions with less than $50 billion in consolidated assets from CFPB rulemaking.
CUNA and NAFCU have endorsed the bill.
The legislation, H.R. 1264, also would allow the CFPB, with the consent of banking regulators to revoke the exemption with respect to a specific regulation or class of institutions.
The CFPB has the power to exempt institutions from its rules, but critics of the agency have said that the bureau has not used that authority effectively.
The bill is one of several the panel will consider on Jan. 17. The House already has passed a huge regulatory overhaul bill, Financial Services Chairman Jeb Hensarling’s (R-Texas) Financial CHOICE Act. However, Senators have made it clear they will not consider that legislation.
Instead, a bipartisan group of senators, led by Banking Chairman Mike Crapo (R-Id.) have developed a more modest bill to overhaul parts of Dodd-Frank. That legislation, S. 2155, has not yet been considered by the Senate and it does not include the CFPB changes in the House bill.
H.R. 1264 would help alleviate the regulatory burden that many credit unions face, CUNA President/CEO Jim Nussle wrote in a letter to the House committee.
“The CFPB has not adequately used its exemption authority even though credit unions and small banks did not perpetrate the abuses that caused the financial crisis and have no pattern of committing financial abuse or leading consumers into cycles of debt,” Nussle said.
NAFCU officials agreed.
“This would go a long way to helping community financial institutions do not suffer unintended regulatory burdens from new CFPB rules,” Brad Thaler, NAFCU vice president of legislative affairs, said in a letter to the panel.
Some consumer groups disagree. “Considering the success the CFPB has had in fighting for consumers, it is troubling that H.R. 1264 would essentially exempt a large part of the banking industry from the CFPB’s supervision,” Scott Astrada, director of federal advocacy for the Center for Responsible Lending, told a House subcommittee last week, in testimony opposing the bill.
The credit union groups have criticized former CFPB Director Richard Cordray for not having used the agency exemption authority.
It remains unclear how Acting CFPB Director Mick Mulvaney, a critic of the CFPB under Cordray’s leadership, may use that exemption authority.
One of the leading candidates for CFPB Director, NCUA Chairman J. Mark McWatters, was critical of Cordray’s use of that authority.