November 07, 2023

NAFCU, CUNA raise several objections to CFPB’s FCRA rulemaking proposals

CFPB building

NAFCU and CUNA wrote a joint letter Monday to CFPB Director Rohit Chopra urging the bureau to hold a new Small Business Regulatory Enforcement Fairness Act (SBREFA) Panel where Small Entity Representatives (SERs), which includes credit unions, can better estimate the impact of the proposals in its Fair Credit Reporting Act (FCRA) rulemaking effort and the potential costs on operations.

In the letter, the associations called for a new outline to be released because it currently represents “an unwarranted and vast expansion of the intent and scope of the FCRA to impose additional requirements on credit unions, exposing these community-based, not-for-profit financial institutions to myriad legal and compliance risks, for supposed benefits to consumers that have yet to be quantified.” The associations also noted the lack of details for SERs and stakeholders to offer any meaningful feedback at this time.

The associations made additional arguments including:

  • the FCRA only requires factual issues to be resolved in disputes and legislative history shows that legal issues were not intended to be resolved by furnishers, like credit unions;
  • the definition of “data broker” should be narrow to exclude depository institutions already subject to the requirements of the FCRA and should not impair credit unions’ ability to obtain valuable information like credit header data;
  • credit unions should be permitted to continue using medical debt information as they see fit because this data offers an important means of confirming ability to repay; and
  • the CFPB should provide at least 24 months to implement any final rule so that credit unions can consult with their various business units to ensure proper compliance.

Last month, NAFCU and other trade associations wrote to the bureau to ask to move the start of the timeline to allow SERs more time to gather feedback for the SBREFA.

NAFCU will continue to engage the CFPB and work to minimize regulatory burdens on credit unions.