WASHINGTON–There may be no agency in greater flux in Washington right now than the CFPB, and that flux extends to credit unions, which have been left to comply with its statutes—or maybe not, in some cases.

Republicans in Congress and the administration have gutted the agency’s staff and rescinded many of its rules. An attempt to kill the CFPB’s budget via the giant reconciliation bill was overruled by the Senate Parliamentarian, with the result being the legislation’s language was adjusted to reduce the amount of money the Bureau can draw from the Fed. Yet that would still represent greater funding than it is currently receiving. 

Now, with the Senate having passed its version of the reconciliation bill and sent it back to the House, the fate of the CFPB appears to be among the biggest questions coming out of the debate in Washington. 

“Clearly, the future of the CFPB is of utmost interest to our members,” said Carrie Hunt, chief advocacy officer with America’s Credit Unions. “We are trying to make sure that the CFPB stays focused on previously unregulated actors. We’re trying to make sure that overreach doesn’t occur…America’s Credit Unions and our legacy organizations have long supported there being additional oversight of the CFPB both in the form of having a bipartisan commission and having it be put under the appropriations process.”

As Hunt has previously discussed with the CU Daily, many of the CFPB’s statutes remain in place. Now, with Congress reducing the amount the CFPB can draw from the Fed, it could put the Bureau in the position of having to go back to Congress to ask for additional funds to enforce those statutes, she observed.

An ’Additional Layer’

“So, certainly that will add an additional layer of accountability,” said Hunt, noting many other questions also remain, including who will lead the CFPB and what it will look like moving forward as it reduces staff—nearly everyone has been let go—and perhaps adds some staffing back.

“I do think that it would be incredibly challenging for the CFPB to perform its statutory obligations if it were to remain at the current staffing level,” Hunt stated. “I do think that we will end up with some additional staff back at the CFPB. I think what will likely stand is some of the CFPB statutes relative to either only focusing on depositories or having some issues be considered by the states.”

What Should Credit Unions Do?
Asked by the CU Daily what credit unions of more than $10 billion in assets—which is the asset threshold for compliance with CFPB regulations—should do moving forward, Hunt said that unless a rule has been formally repealed by the CFPB, the credit union still has to comply, even if examinations are not being conducted.

“I think, ultimately, (examinations) will start again,” Hunt forecast. “I do think we will start to see a bit of more normal return to those entities being examined. I certainly don’t think that credit unions necessarily are first on the list.”