August 21, 2020

NAFCU: New CFPB program will provide clarity to CUs

CFPBFollowing the CFPB's launch of a pilot advisory opinion (AO) program to publicly address regulatory uncertainty in its regulations, NAFCU's Elizabeth LaBerge offered the association's support as it "will provide credit unions with critical, timely guidance, enabling them to serve their members with confidence."

Launched in June, the pilot program allows entities to submit requests for additional clarity on regulations. The bureau will provide public responses to requests on certain topics that meet the program's priorities, which include:

  • provide consumers with timely and understandable information to make responsible decisions;
  • identify outdated, unnecessary or unduly burdensome regulations in order to reduce regulatory burdens;
  • provide consistency in enforcement of Federal consumer financial law in order to promote fair competition; and
  • ensure markets for consumer financial products and services operate transparently and efficiently to facilitate access and innovation.

LaBerge, NAFCU's senior regulatory counsel, said the authoritative guidance provided by AOs "will not only provide clarity and certainty in designing compliant processes, procedures and products, it will also provide credit unions with a helpful tool in handling disagreements with vendors or third-parties who may be operating with a different interpretation of a rule."

LaBerge also offered support for allowing credit unions to submit requests through third parties, such as NAFCU, or for the CFPB to redact the identity of the requestor when an AO is published to protect against reputational risk, and urged the bureau to minimize access to sensitive information.

In addition, LaBerge asked the bureau to provide more information on how it will respond to declined requests for AOs, including if the issue has already been responded to in other guidance or if a rulemaking is ongoing.

She also flagged potential unintended consequences AOs could have on credit unions and recommended the bureau work with its Credit Union Advisory Council to ensure credit unions' unique structures are considered when providing guidance.

To ensure AOs are easily available to credit union compliance officers and legal counsel, LaBerge offered recommendations for AOs to be easily searchable online and for an AO's language to be consistent when it is published in the Federal Register and posted on the bureau's website.

The bureau plans to fully implement the AO program once the pilot program ends and it has reviewed comments received on its proposal.