Legislative and Regulatory Priorities
The NAFCU-supported Transparency in CFPB Cost-Benefit Analysis Act was introduced in March 2023 by Rep. Alex Mooney (R-WV). This legislation, which would ensure the CFPB is held to the same standard as other agencies when reviewing the cost-benefit analysis for its proposed rules, was previously introduced in the 117th Congress. In the previous Congress NAFCU also supported the CFPB-IG Act of 2021, which would create an Office of the Inspector General within the CFPB.
In December 2022, NAFCU wrote to the Senate Banking Committee and House Financial Services Committee preceding their semi-annual oversight hearings of the CFPB. NAFCU advocated for the CFPB to exercise its discretion to provide regulatory relief to credit unions; coordinate with the NCUA and other regulatory agencies in its Section 1033 rulemaking effort; not classify financial institutions’ regulated and clearly disclosed fees as “junk fees”; clarify its enforcement authority for unfair, deceptive, or abusive acts and practices (UDAAP); minimize burdens to credit unions in the Section 1071 rulemaking; coordinate examinations with the NCUA; increase oversight of fintechs; adopt more flexible rules for the acceptance of electronic signatures; and ensure a fair balance of error resolution responsibilities under Regulation E. Additionally, NAFCU continues to support reforming the CFPB’s structure so the Bureau is led by a five-member bipartisan commission rather that a single director.
The CFPB recently took action on several notable rulemakings/issues, and NAFCU remains actively engaged to ensure credit unions’ concerns are taken into account.
- Section 1033 Consumer Access to Financial Records: The CFPB convened Small Business Regulatory Enforcement Fairness Act (SBREFA) panels to review an outline of proposals in advance of issuing a proposed rule later in 2023. NAFCU submitted comments in January 2023 expressing significant concerns with the outline of proposals and urging the Bureau to limit the scope of the Section 1033 proposed rule.
- Credit Card Penalty Fees: The CFPB issued a proposed rule in February 2023 that would reduce the safe harbor amounts for credit card late payment fees to $8 for all violations, down from the current levels of $30 for initial violations and $41 for repeat late payments within a six-month period. Additionally, the proposal would eliminate inflation adjustments of the safe harbor amounts and exclude post-charge-off costs from cost analysis determinations for setting late payment fees.
- Section 1071 Small Business Lending Data Collection: The proposal would require credit unions and credit union service organizations that originated at least 25 covered small business credit transactions in each of the two preceding calendar years to collect and report small business credit application data, including data related to the ethnicity, race, and sex of small business applicants’ principal owners. NAFCU’s comment and a joint letter NAFCU signed urged significant changes to the proposed rule to reduce compliance burdens imposed on credit unions.
- Overdraft: The CFPB is considering whether to engage in a rulemaking to limit overdraft fees.
In its Fall 2022 rulemaking agenda, the CFPB listed a proposed rule on automated valuation models and other items carried over from earlier agendas.