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Ahead of tomorrow’s hearing to conduct a semi-annual review of the CFPB, NAFCU Vice President of Legislative Affairs Brad Thaler wrote to the House Financial Services Committee to comment on the Committee's oversight of the Bureau.

In the letter, Thaler expressed NAFCU’s policy stance on current issues concerning the CFPB including the use of small entity exemption authority commenting that the CFPB “should utilize its statutory exemption authority to recognize the unique nature of and constraints faced by the credit union industry.” The credit union industry has faced massive consolidation since the enactment of the Dodd-Frank Act, which is why the CFPB should provide regulatory relief for small entities, “that cannot afford to comply with complex rules and would otherwise be forced to stop offering services to members,” wrote Thaler.

Regarding Unfair, Deceptive, or Abusive Acts and Practices (UDAAP), credit unions have devoted more resources to UDAAP compliance as a result of unclear standards and unpredictable enforcement. “CFPB should issue a rulemaking to clarify its UDAAP authority,” stated Thaler. 

Of note, Thaler also suggests that the CFPB should strengthen their coordination with NCUA examiners to limit exam burden and help streamline the examination procedure. The letter contains several other NAFCU priorities including E-sign flexibility, suggested CFPB oversight over underregulated fintech companies, and ensuring the Electronic Funds Transfer Act (Reg E) has a “clear error resolution mechanism that ensures that third parties are also held accountable for helping resolve the issue when a dispute arises.”

In concluding NAFCU’s comments, Thaler reiterated NAFCU’s support for legislation moving the governance of the  CFPB to a five-person commission rather than a single director, saying that a commission would, “allow multiple perspectives and robust discussion of consumer protection issues throughout the decision-making process.”

This will be CFPB Director Rohit Chopra’s first public appearance before Congress since his confirmation last month. The Bureau earlier this month issued a series of orders to collect information on the business practices of large technology companies operating payments systems in the U.S., to better understand how these firms use personal payments data and manage data access to users to ensure adequate consumer protection.

According to Chopra’s prepared testimony, he is set to outline three main priorities before the Committee focused on increasing competition in consumer financial markets, specifically in the mortgage refinance market, as well as increased scrutiny of repeat-offender companies, and searching for ways to “restore relationship banking in an era of big data.”

Of note, Chopra says that the restoration of “relationship banking” should be a top priority for the CFPB. The Bureau will also work on expanding their monitoring of the mortgage market conditions to try to “minimize avoidable foreclosures,” as the economy gets back on track.

Read Thaler’s full letter here. NAFCU will monitor the hearing and report on any pertinent information related to credit unions.