Newsroom
CFPB Director Chopra, NAFCU’s Berger discuss CU interests during Caucus
CFPB Director Rohit Chopra joined NAFCU President and CEO Dan Berger for a fireside chat during NAFCU’s Congressional Caucus yesterday. Berger asked Chopra several questions that are of heightened interest for credit unions, including questions on Regulation E, oversight on non-depository institutions, and overdraft and credit card fees.
Berger asked Chopra to explain his thinking on Regulation E and the disproportional burden placed on credit unions rather than peer-to-peer (P2P) payment providers. Chopra discussed the Bureau’s concerns around customer service and liability, noting that the Bureau has been heavily focused on this issue, sending inquiries to the Big Tech payment providers to better understand how they’re adhering to existing regulations to better inform future movement on the issue. In December, NAFCU submitted comments to the CFPB regarding its inquiry into these payment platforms. When discussing the timing of potential guidance or rulemaking, Chopra noted that “we don’t have a clock, but we want to move on it.”
Continuing the conversation into oversight of non-depository financial institutions, Chopra highlighted that while the Bureau can’t license or charter, at a minimum he wants to ensure compliance with existing law so that there’s some degree of parity, including working with states to ensure they’re also playing their role as a watchdog. When discussing larger participant authority, Chopra said their work is limited but the Bureau is watching big tech firms “chomping at the bit” to get into the financial services industry, noting that it’s the “holy grail” to collect data that can identify and influence consumer spending habits. Chopra continued to note that this approach is a much different mindset than the history of banking services, which has been “more about protecting customer information and not comingling financial services with other commercial enterprises.”
In May, NAFCU offered support for the CFPB’s expanded supervision over fintechs and other nonbank entities, encouraging “all relevant regulators to ensure that when fintechs compete with traditional financial institutions, they do so on a level playing field where smart regulations and consumer protections apply to all actors in the consumer marketplace.”
When Berger and Chopra moved on to discuss overdraft fees, Chopra made it clear that it’s important to treat overdraft as a service, and not as a penalty or a way to drive up revenue. The Bureau is looking into institutions who rely heavily on overdraft fees to seek increased rationale. Citing their recently published data specific to credit unions, Chopra noted that the use of overdraft fees should be reviewed regularly with a “gut check,” especially as institutions are continuing to rapidly grow. Noting that being compensated for a service is a good thing, but as the market is moving in a much more competitive direction, the CFPB wants to ensure consumers aren’t surprised or shocked by overdraft fees.
In a similar conversation around credit card late fees, Chopra shared that the Bureau has opened up a large-scale review around the way the Federal Reserve Board crafted credit card rules as they pertain to late fees and collecting data. Noting that the law requires that penalties be proportional to the violation, the CFPB’s review, which will go through the rulemaking process by next year, will ensure that the credit card business model doesn’t become distorted by fees.
Concluding their conversation, Berger asked Chopra to discuss the Bureau’s relationship with the NCUA, to which Chopra noted that they work closely together both formally through the interagency process; but also communicate regularly, as most agencies are in a mindset of wanting to be prepared if macro-economic conditions change, especially if they deteriorate, and how they respond to particular “pain points” such as loan services, debt collecting, and credit reporting.
The NAFCU Board of Directors, along with several members of the association’s staff, met with Chopra in July to discuss several credit union related topics.
NAFCU’s Congressional Caucus came to a close Wednesday. Stay tuned to NAFCU Today for recaps and insights shared over the course of the event.
Share This
Related Resources
Add to Calendar 2024-04-30 14:00:00 2024-04-30 14:00:00 State of Consumer Credit: How Behaviors have Shifted and Trends in US Bankcard Benchmarks About the Webinar In an era marked by volatility and evolving credit trends such as historic inflation and the rise of BNPL, credit unions must adapt to mitigate risks effectively. Join the experts at FICO in exploring how to leverage FICO Scores to enhance competitiveness while maintaining stability and compliance. Key Takeaways: Learn about the latest in consumer credit behaviors and score distributions since the pandemic Take a closer look at major US bankcard trends in comparison to the credit union industry, such as average card spend, balance, missed payments and more. View On-Demand Web NAFCU digital@nafcu.org America/New_York public
State of Consumer Credit: How Behaviors have Shifted and Trends in US Bankcard Benchmarks
preferred partner
FICO
Webinar
Add to Calendar 2024-04-25 14:00:00 2024-04-25 14:00:00 ChatGPT: What AI can do for you! ChatGPT has been created with one main objective – to predict the next word in a sentence, based on what's typically happened in the gigabytes of text data that it's been trained on. Did you ever hear of the saying, “People fear the unknown?” Artificial intelligence scares people, but it is the future, and you need to understand the tools and resources it offers. It’s also about saving time, that’s what technology and in this case, artificial intelligence can do for you. If you want to save time and have a better quality of life, this training is for you. Once you give ChatGPT a question or prompt, it passes through the AI model and the chatbot produces a response based on the information you've given and how that fits into its vast amount of training data. It's during this training that ChatGPT has learned what word, or sequence of words, typically follows the last one in a given context. During this webinar, ChatGPT: What AI can do for you, you’ll discover the background, purpose, usability, and the pros and cons. Don't miss this opportunity! Key Takeaways Learn the background of AI Understand the purpose of AI Identify the pros and cons Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 25, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCRMs Risk titles Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
ChatGPT: What AI can do for you!
Credits: NCRM
Webinar
Add to Calendar 2024-04-25 14:00:00 2024-04-25 14:00:00 Unifying Two Different Executive Benefits Programs About the Webinar In part one we discussed how to retain key positions during a time of transition. In part two, we will look at how to combine executive benefits programs from two different organizations into a single high-performing program. Evaluating each program includes many different facets, from strategy and expense to performance and servicing. This session will provide important considerations, whether or not you have pending M&A activity. Key Takeaways: Is the plan design both retentive and efficient? Is the benefit expense properly mitigated? Does the legal agreement reflect the board’s intent? View On-Demand Web NAFCU digital@nafcu.org America/New_York public
Unifying Two Different Executive Benefits Programs
preferred partner
Gallagher
Webinar
Add to Calendar 2024-04-24 14:00:00 2024-04-24 14:00:00 Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage About The Webinar Join us to learn more about network lending, a cooperative model allowing credit unions to optimize liquidity and achieve loan growth. Discover how credit unions can participate in loan pools with other institutions, allowing them to diversify portfolios, access loans with potentially lower risk and higher yields, and expand lending capacity without necessarily needing a surge in deposits. Delve into how credit unions can pool their resources, set common underwriting and pricing standards, and collectively originate, buy, and sell loans to optimize liquidity management. Hear from your peers about best practices, case studies, and practical strategies to harness the full potential of network lending and how it's helped their credit unions. Don't miss this valuable opportunity to learn how to strengthen your credit union's position in today’s competitive environment. Key Takeaways: How network lending differs from traditional lending The benefits of participating in loan pools with other credit unions How credit unions can set common underwriting and pricing standards and collectively originate, buy and sell loans to optimize liquidity management Why network lending is critical to loan growth Watch On-Demand Web NAFCU digital@nafcu.org America/New_York public
Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage
preferred partner
LendKey
Webinar
Get daily updates.
Subscribe to NAFCU today.