Reg burdens focus of CFPB hearing
March 17, 2011 – Key concerns raised by NAFCU regarding the regulatory burden posed by future rulemaking of the Consumer Financial Protection Bureau were addressed yesterday in a three-hour hearing of the House Financial Services Subcomittee on Financial Institutions.
NAFCU President Fred Becker, in a letter entered into the record of the panel's first oversight hearing on the CFPB, urged strong congressional oversight of the new bureau, that the vote margin required for the Financial Stability Oversight Council to veto certain CFPB rules for safety-and-soundness reasons be eased and thatthe CFPB not take significant action before it has a Senate-confirmed director.
Indeed, following yesterday's hearing, Rep. Spencer Bachus, R-Ala., introduced a bill that would eliminate the single-director post and establish a five-member commission, each of whose members would be nominated by the president and confirmed by the Senate.
Elizabeth Warren, a special advisor to the Treasury secretary and assistant to the president, was the sole witness in yesterday's hearing. She testified on the CFPB as the administration's top advisor on the staffing and operations of the bureau.
Early on the discussion turned to the issue of regulatory burden, and Warren reiterated she was mindful of the concerns of credit unions and community banks about costly new rules. She called the institutions "good partners" for their members and customers.
Warren addressed a wide range of questions from the panel, often focusing on the limits of the CFPB's authority and its primary focus, which she defined as ensuring disclosures and other information regarding consumer financial products are clear. Subcommittee Chairman Shelley Moore Capito, R-W.Va., asked Warren if the bureau was focusing on weeding out existing, duplicative regulations. Warren said it is and that she is learning from credit unions and community banks about problematic rules. She and panel members also discussed and made clear the FSOC's ability to veto certain CFPB rules.
Also, Warren reiterated the CFPB is working to combine the mortgage disclosures required under the Truth in Lending Act and Real Estate Settlement Procedures Act into a "one-page mortgage shopping sheet" consumers can use to compare one mortgage against another.
Warren mentioned credit unions and community banks several times throughout the hearing. In addition to the above, she touted credit unions' and community banks' skills in "relationship banking" and their tendency to customize products to users; and that they are more clear and up front than other providers about product price and risk.
She also said credit unions and community banks were not the cause of the housing crisis.
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