September 21, 2016

Cordray hints at future debt collection rule during Caucus

CFPB Director Richard Cordray reiterated during NAFCU's Congressional Caucus Wednesday that he agrees credit unions did not cause the financial crisis and said the more the bureau hears the credit union perspective, the better the bureau can respond.

He detailed some of the mortgage rule changes the bureau has made, covering the qualified mortgage rule, the Truth in Lending Act and Real Estate Settlement Procedures Act integrated mortgage disclosure rule and the Home Mortgage Disclosure Act rule. He also talked about how the bureau upped the threshold for mortgage originations for smaller financial institutions, including credit unions, and how CFPB expanded the definition of rural.

Discussing what the bureau is currently working on, Cordray said CFPB is finalizing its prepaid rule, combing through the more than half a million comments it has received so far on its payday loan proposal and proposals under consideration regarding third-party debt collection.The bureau plans to address first-party debt collection, which the industry "will hear more about that soon," he said. NAFCU expects the bureau to publish an outline of first-party debt collection rules in the fall, then convene a SBREFA panel soon after to discuss potential impacts on small entities. NAFCU has recommended several credit union members to serve on the panel.

In other remarks, Cordray said CFPB is working to enhance checking accounts for consumers and wants financial institutions to offer lower-risk account options more broadly.

"Credit unions provide enormous value to millions of people around the country," he said.

In closing, Cordray encouraged credit unions to help the bureau address three issues:

  1. Help young people increase their financial capability. "These young people are your future members," he said.
  2. Workplace financial education. "The workplace is the only place most adults will ever receive any financial education at all," he said.
  3. Prevent elder financial abuse. He recognized that credit unions are often the first to notice the signs of financial abuse of their elder members. He urged them to keep this as a focus and to share the bureau's materials with their members.

Next year, NAFCU's Congressional Caucus is Sept. 10-13 in Washington.