WASHINGTON–The Defense Credit Union Council (DCUC) has sent a letter to the House Financial Services Committee ahead of a hearing scheduled today on the Consumer Financial Protection Bureau (CFPB).
As the CU Daily reports separately, a credit union CEO is among those testifying before the committee.
“Unfortunately, in recent years we have witnessed CFPB overreach and one-size-fits-all rulemaking that unintentionally harm credit unions and the military communities they serve,” the letter states. “We firmly believe that commonsense reforms to the Bureau’s governance and accountability will strengthen consumer protection while preserving the vital services our member-owned credit unions provide to defense communities.”
The letter argues that the CFPB’s “sweeping regulatory actions often fail to differentiate Main Street credit unions from the bad actors on Wall Street, imposing outsized burdens on the very institutions that consistently rank among the highest in consumer satisfaction.”
Points Raised
The letter also states:
- Since the CFPB’s inception, credit unions have been subject to more than 200 regulatory changes – amounting to thousands of pages of new requirements – “despite the fact that credit unions did not cause the financial crisis.”
- Disproportional “one- size-fits-all” rules have disproportionately hurt smaller community institutions. “A comprehensive study found that in 2014 alone, regulatory compliance cost credit unions $7.2 billion – a burden that has grown 40% since 2010, with small credit unions bearing the brunt.”
- Regulatory compliance consumes an estimated $6.1 billion per year for credit unions (about $115 annually per credit union household),
- There has been an acceleration of consolidation in the credit union sector – roughly 200-300 mergers annually in recent years – as “smaller institutions struggle to survive under crushing regulatory burden. This trend is deeply concerning for military consumers, who lose access to locally attuned financial partners when a base credit union disappears”
Additional Burdens Cited
In addition, the DCUC said the dual oversight of the largest CUs by both NCUA and the CFPB is costly in more ways than one.
“In practice, CFPB examinations and supervision have often mirrored a bank-style approach ill-suited to member-owned institutions, creating duplicative paperwork and anxiety even when no consumer harm is present,” the letter states. “Smaller credit unions (under $10 billion in assets) may not be directly examined by CFPB, yet they must still comply with every CFPB rule, often without the specialized compliance staff that big banks employ. Thus, CFPB’s rules trickle down to all credit unions, regardless of size.”
Other Requests
The DCUC also called for:
- CFPB Reform, Transparency, Accountability, and Tailored Regulation
- Restructuring the CFPB’s Governance to a Bipartisan Commission
- Subjecting the CFPB to Congressional Appropriations
- Establishing an Independent Inspector General (IG) for CFPB
- Clarifying CFPB’s Mission to Include Competition and Cost-Benefit Analysis
- Strengthening Small Business and Community Input in Rulemaking
- Providing Clear Rules and Safe Harbors: Clarifying UDAAP Authority
- Preserving the Role of State Regulators in Insurance Matters: