September 26, 2023

ICYMI: CUs feel impact of CFPB’s War on Main Street

CFPB logoAs the U.S. Supreme Court gets ready to hear oral arguments next week in a case challenging the constitutionality of the CFPB’s funding structure, recent responses to a NAFCU-member survey demonstrate the bureau’s misguided war on Main Street. Notably, 60 percent of respondents do not think the bureau acts with consumers’ best interests in mind.

“The CFPB has shown the financial sector that they do not trust consumers to make educated and informed decisions when it comes to their finances,” one respondent wrote.

In addition, only a quarter of respondents felt the financial services space is safer now than it was in 2010. Other highlights from the survey include:

  • 79 percent of respondents do not think the bureau’s actions deter bad actors from engaging in similar practices;
  • 92 percent disagree that the bureau has contributed to a more level playing field within the financial services industry;
  • 88 percent the bureau’s regulatory burden has given a competitive advantage to nonbank entities; and
  • 90 percent disagree that the bureau’s recent fight against “junk fees” has been well explained and understood by consumers.

“The CFPB's current crusade against ‘junk fees’ has done little to protect the consumer at the expense of harming an income stream essential to credit unions and community banks,” wrote a respondent.

Read more about the negative consequences of the bureau’s proposal to cap credit card late fees at $8.

NAFCU opposes the CFPB’s examination and enforcement authority over credit unions, given they were not responsible for the financial crisis and are highly regulated. NAFCU also strongly supports legislative improvements to change the structure of the CFPB from an unaccountable single director to a bipartisan commission and to require the bureau to go through the congressional appropriations process to increase accountability and transparency.

NAFCU will monitor next week’s Supreme Court arguments and keep credit unions informed of any developments. The association will continue to advocate for reforms to the bureau.