CFPA revision clears; mark-up resumes Tuesday

Oct. 16, 2009 – The House Financial Services Committee yesterday approved an amendment to H.R. 3126, the Consumer Financial Protection Agency Act, to limit but not eliminate the CFPA’s primary consumer compliance examination authority over some federally insured financial institutions.

Proposed by Reps. Brad Miller, D-N.C., and Dennis Moore, D-Kan., the revision applies to banks with less than $10 billion in assets and credit unions with less than $1.5 billion in assets.

NAFCU continues to believe that the CFPA could have a role in the oversight of currently unregulated consumer financial service providers, but it does not believe that the proposed agency should oversee federally insured credit unions.

Thursday’s CFPA amendment affects consumer compliance examinations only, not the CFPA’s authority to promulgate and enforce consumer financial service protections.

Briefly, it would retain the authority of prudential regulators (including NCUA) to examine banks under $10 billion in assets and credit unions under $1.5 billion in assets for consumer practices. The CFPA could remove a prudential regulator from this role for specific institutions if it found exams were inadequate. It would also retain authority over the consumer complaint process for “all banks and nonbanks,” which means all consumer service providers.

NAFCU views the amendment as having only limited impact on the CFPA’s potential costs to credit unions. But if CFPA examination authority is limited in a final bill, it said, credit unions should have parity with banks, with all institutions under $10 billion excluded from CFPA’s primary exam authority.

An proposal by Rep. Jeb Hensarling, R-Texas, to revise the Miller-Moore amendment to provide affected institutions an exemption from all CFPA regulation failed, 27-41. The panel also rejected a proposal by Rep. Judy Biggert, R-Ill., to expand the Federal Financial Institutions Examination Council rather than create a CFPA.

H.R. 3126 mark-up resumes Tuesday afternoon.