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The House Financial Services Committee (HFSC) held its CFPB oversight hearing yesterday, discussing many points relevant to credit unions. Of note, the Senate Banking Committee holds its CFPB oversight hearing today at 10 a.m. Eastern. 

During yesterday’s hearing, Chairwoman Maxine Waters, D-Calif., offered support for the CFPB while expressing dismay with the Fifth U.S. Circuit Court of Appeals’ ruling, which stated that the bureau’s funding structure is unconstitutional – the CFPB receives funding through the Federal Reserve rather than the congressional appropriations process. Ranking Member Patrick McHenry, R-N.C., said in his opening statement that he intends to take oversight more seriously in the next Congress. He also noted that the CFPB’s “lack of transparency is of grave concern.

CFPB Director Rohit Chopra gave his opening statement, which focused on the CFPB’s current work regarding evaluations of big tech payment apps, proper implementation of section 1033 of the Dodd-Frank Act, and updating privacy policies required by the Gramm-Leach-Bliley Act (GLBA).

In the questioning period, Chopra noted that the bureau is collecting data on fraud with peer-to-peer (P2P) payment apps, as the CFPB has heard from financial institutions about “their inability to understand fraud when it comes to use of these apps and big tech technologies.” He said the bureau will offer more information to financial institutions on how to deal with P2P fraud. Of note, NAFCU has consistently advocated against the expansion of Regulation E – most recently in an interview with the Wall Street Journal.

Chopra also said that the bureau is currently under court supervision to issue a final rule in March 2023 regarding small business data collection pertaining to section 1071 of the Dodd-Frank Act. In NAFCU’s letter to the HFSC, the association expressed its opposition to this rule because “compliance costs will weigh disproportionately on credit unions and hurt their ability to help small businesses.”

Notably, Chopra also expressed that the GLBA’s privacy and security frameworks need to be enhanced to ensure data isn’t being shared and sold in an unauthorized manner. NAFCU has long advocated for comprehensive federal data privacy standards through its six data privacy principles.

Additionally, NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the Senate Banking Committee ahead of its CFPB oversight hearing; the letter reiterated many key points from NAFCU’s letter to the HFSC. NAFCU will monitor today’s hearing and provide any updates via NAFCU Today.