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CFPB Director Rohit Chopra appeared before the House Financial Services Committee Wednesday during a hearing to conduct a semi-annual review of the CFPB. Chopra discussed his three main priorities as director of the Bureau and expressed his desire to focus his oversight on the largest, nationwide offenders as opposed to smaller institutions.

NAFCU Vice President of Legislative Affairs Brad Thaler reiterated NAFCU’s policy stance on current credit union issues concerning the CFPB ahead of the hearing.

Of note, Chopra's three main priorities include:

• a focus on increasing competition in consumer financial markets, specifically in the mortgage refinance market;
• an increase in scrutiny of repeat-offender companies; and
• a search for ways to “restore relationship banking in an era of big data.”

During the hearing, lawmakers raised several issues that impact credit unions, including:

• UDAAP: The CFPB in March rescinded its policy statement related to the "abusive" prong of the unfair, deceptive, or abusive acts or practices (UDAAP) provision. The statement was issued in January 2020 following calls by NAFCU to clarify the prong and efforts by the bureau to gather feedback on the issue. During the hearing, Chopra explained his desire to create a strong jurisprudence on the subject. NAFCU has consistently highlighted UDAAP as an area where the CFPB could further clarify its expectations for credit unions and the specific factual basis for violations through a rulemaking.
• QM: Chopra was asked whether the CFPB has seen an uptick in concerns since the extension of the qualified mortgage (QM) patch, to which he responded that the economic uncertainty and housing market boom has not been normal, and it is hard to say how it has worked so far. The bureau in April issued a final rule to delay the mandatory compliance date of its general QM rule to Oct. 1, 2022; NAFCU offered its support of the delay as it gives lenders more time to utilize the government-sponsored enterprise (GSE) patch.
• CFPB structure: Many committee members raised concerns with the bureau's single-director structure. Last year, the Supreme Court found that the bureau's "leadership by a single individual removable only for inefficiency, neglect, or malfeasance violates the separation of powers." NAFCU has long advocated that the bureau's leadership structure should be reformed to a commission-based model to ensure transparency and stability, and has also offered support for bringing it under the congressional appropriations process.
• Payday lending: When asked about whether or not he would go beyond restoring the 2017 rule cracking down on payday lenders, Chopra did not address the rule specifically and only stated the bureau will “monitor consumer financial markets carefully.” NAFCU will remain in close contact with the bureau on this topic and continue to urge the Bureau to exempt credit union PAL loans from the CFPB’s payday lending rule.
• Level playing field: Ensuring a level playing field and proper oversight within the financial services market is a priority for NAFCU. Chopra agreed with this sentiment during the hearing as lawmakers asked him about fintechs, stating he wants to ensure these companies do not take advantage of customers. In addition, he expressed concerns about fintechs and big tech companies having the ability to kick users off their platforms at their own discretion without any resolution mechanism.

Relatedly, Chopra today will appear before the Senate Banking Committee as part of the semi-annual report to Congress on the bureau. Thaler wrote to the committee Wednesday to stress NAFCU's thoughts on current issues and pledged to continue to work with the committee and the bureau.

NAFCU will monitor today's hearing – slated for 10:00 a.m. Eastern – and will keep credit unions up-to-date on the latest from the CFPB via NAFCU Today.