Compliance Blog

Written by Steve Van Beek

As was mentioned yesterday, President Obama did nominate Richard Cordray for the position of Director of the new CFPB.  President Obama's remarks on the nomination are here.

Elizabeth Warren has blog posts on both the White House blog and the CFPB blog discussing the nomination of Cordray and the progress of the CFPB, respectively.  

The CFPB also issued a Progress Report which summarizes its mission, values and progress since the passage of Dodd-Frank.  The report is a very informative and comprehensive read.  On page nine is a list of the CFPB's statutory objectives:

T H E   C F P B ’ S   S TA T U T O R Y   O B J E C T I V E S

1. To ensure that consumers have timely and understandable information to make responsible decisions about financial transactions;

2. To protect consumers from unfair, deceptive, or abusive acts or practices, and from discrimination;

3. To reduce outdated, unnecessary, or overly burdensome regulations;

4. To promote fair competition by enforcing the Federal consumer financial laws consistently; and

5. To advance markets for consumer financial products and services that operate transparently and efficiently to facilitate access and innovation.

I know I'm preaching to the choir when I rhetorically ask which of the items listed above has not been getting the same amount of attention and news stories as the others. 

I thought I'd pull the full language out from Dodd-Frank, Section 1021(b)(3):

"(b) OBJECTIVES - The Bureau is authorized to exercise its authorites under Federal consumer financial law for the purposes of ensuring that, with respect to consumer financial products and services - 

......................................

(3) outdated, unnecessary, or unduly burdensome regulations are regularly identified and addressed in order to reduce unwarranted regulatory burden;"

I hope the CFPB takes this objective as seriously as its four other objectives.  As the CFPB takes over powers and begins to implement its regulatory authority, credit unions might want to remind the CFPB that one of its objectives is to consider the regulatory burden.

Elizabeth Warren discussed this issue in a March 16, 2011 hearing before the House Subcommittee on Financial Institutions and Consumer Credit:

"We recognize that government regulation also has played a part in making credit products more opaque. Mandated federal disclosures, sometimes written in obscure language, covering all manner of subject matter, and reproduced in small type, too often have imposed significant burdens on lenders while providing little benefit to consumers. It should be the job of the consumer bureau to revise and update outdated regulations and useless disclosures as aggressively as it monitors the fine print layered on by lenders. If everything is on the table, including existing government regulations, the goals of transparency and consumer understanding can become a reality."