McWatters urges Cordray to exempt CUs from CFPB oversight
NCUA Chairman J. Mark McWatters asked CFPB Director Richard Cordray in a letter today to conditionally exempt federally-insured credit unions with assets of more than $10 billion from the bureau's examination and enforcement authority – something NAFCU has continually advocated.
NAFCU has previously sent McWatters its list of regulatory priorities for 2017, which included exempting all credit unions from the CFPB.
"NAFCU – from the bureau's inception – was against the CFPB having direct oversight over credit unions and was the only financial services trade association to take that stance," said NAFCU President and CEO Dan Berger. "NAFCU and its members thank Chairman McWatters for making this request directly to Director Cordray."
In the letter, McWatters cited credit unions' unique structure and "positive role for consumers in today's financial services marketplace" as reasons for exempting federally-insured credit unions from the bureau's oversight.
"I believe that role can and should be distinguished from the role played by for-profit, investor-owned and -controlled financial institutions," McWatters continued. "Subjecting FICUs and their consumer/member owners to the dual examination — and, in the case of federally insured, state-chartered credit unions, triple examination — regime mandated under section 1025 of the CFPA imposes unnecessarily burdensome costs on FICUs, particularly given their positive, consumer-focused role."
He also explained that exempting federally-insured credit unions from the bureau's jurisdiction would allow the NCUA to "act as the primary agency responsible for the examination and enforcement of consumer financial protection laws for only six additional FICUs," which, he added, would free up resources for the CFPB.
"I believe the CFPB and the NCUA can and should work together to address the inherent unfairness that occurs when aggressive punitive fines are imposed on FICUs and their member owners, minimize unnecessary examination costs for FICUs, and protect consumers in a way that is fair while also maintaining a level playing field for all parties involved," McWatters wrote.
In the event that Cordray does not want to move forward with exempting federally-insured credit unions from the bureau's oversight, McWatters requested that the two agencies work together to conduct all examinations of those institutions jointly.
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