Compliance Blog

Written by Steve Van Beek

One of the concerns when the CFPB took over regulatory authority for consumer regulations was whether the regulations would cease to reflect the uniqueness of credit unions.  

For example, NCUA's Truth in Savings (Part 707 for credit unions) is not identical to Regulation DD for banks.  Similarly, NCUA's Privacy Regulation (Part 716) is not identical to Regulation P for banks.  

The recent streamlining initiative by the CFPB also indicated the CFPB will be republishing the consumer regulations under Chapter X of Title 12 of the Code of Federal Regulations.  

During this republishing, the CFPB has indicated it will combine regulations that were previously issued by different regulators.  In other words, the CFPB will be combining Reg DD and Part 707 to create one Truth in Savings regulation.  

Here is from the CFPB's Notice:

"In some cases, the Bureau has inherited from different agencies several regulations implementing the same law, which may present opportunities for harmonization."

As we know - the details are often buried in the preamble, staff commentary - or in this case - the footnotes:

"10. As the Bureau republishes the inherited regulations in the coming weeks, it will consolidate separate regulations issued by different agencies to implement the same law. Because the Bureau will make only technical changes with republication, the republished rules will preserve some small but arguably substantive differences among the predecessor rules. The Bureau seeks comment on whether and how best to harmonize the remaining differences."

NCUA had always been under a requirement for Part 707 to be "substantially similar" to Regulation DD - however, there are important differences reflecting the differences between banks and credit unions.

How the CFPB will handle issues such as the prohibition on credit unions using the term "certificate of deposit" remains to be seen.  

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Also - if you were wondering, Reg DD contains the same confusion regarding "free checking" so this combination is unlikely to remove that hurdle or clarify that area.  However, the confusion in that area is a prime candidate for the CFPB's overall streamlining project.