BCFP Improvements

Background

In June 2009, the Obama Administration released its plan for reforming the financial regulatory system. The hallmark of the administration's proposal was the creation of a new government agency aimed at consumer financial protection with rule making power over financial institutions, including credit unions. In January 2012, President Obama, despite opposition from Senate Republicans, appointed former Ohio attorney-general, Richard Cordray, to be the first director of the Bureau.

Under former Director Cordray, the Bureau aggressively pursued rulemaking and enforcement actions, promulgating such landmark regulation as the Home Mortgage Disclosure Act rule and the Ability to Repay/Qualified Mortgage rule. Thanks to NAFCU’s efforts, rulemakings such as the Arbitration rule, were overturned by Congress. NAFCU continues to advocate for tailored regulations that account for the unique nature and economic benefits of credit unions.

The Bureau’s single director, removable-only-for-cause structure has been challenged on several occasions. Most notably, in October 2016, the D.C. Circuit Court of Appeals held in PHH Corp. v. CFPB that the Bureau’s structure is unconstitutional. Although that decision was later reversed, several other lawsuits have popped up across the country, setting up a potential circuit split that could bring the issue all the way to the Supreme Court.