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November 17, 2017

NAFCU recommends CFPB strategy shift ahead of director change

As the CFPB prepares for a new director – in light of current-Director Richard Cordray's announcement that he will step down from the post before the end of the month – NAFCU is recommending the bureau take advantage of the transition and implement a new approach to its rulemaking and enforcement.

In a letter sent Friday to the CFPB, NAFCU Senior Regulatory Affairs Counsel Michael Emancipator outlined nine areas in which the bureau could improve its operations and provide some relief to credit unions. Emancipator was writing in regard to the bureau's 2018-2022 Strategic Plan.

Since Dodd-Frank was enacted, more than 1,500 federally-insured credit unions have closed or merged with other credit unions due to increasing rules and compliance costs, Emancipator wrote. Therefore, NAFCU continues to urge the CFPB to provide regulatory relief – especially for small entities that cannot afford additional compliance costs – and increased transparency and clarity in rulemakings to limit compliance confusion.

To provide credit unions with regulatory relief, NAFCU recommends that the CFPB:

  • increase its use of exemption authority;
  • provide clarification around unfair, deceptive or abusive acts and practices (UDAAP);
  • take a cautious approach to any potential first-party debt collection rule;
  • revise the definition of qualified mortgage;
  • make changes to mortgage servicing rule to allow more flexibility;
  • improve its Consumer Complaint Database to verify claims before a credit union's reputation is unfairly tarnished;
  • expand the threshold related to its remittance rule;
  • limit changes to and provide exemptions from Home Mortgage Disclosure Act (HMDA) reporting; and
  • not proceed with overdraft regulations that would impede credit unions' programs already in place.

Emancipator notes that this regulatory reform agenda would align with President Donald Trump's executive orders to identify possible regulations to repeal, replace or modify.