America’s Credit Unions called on Congress to reform the Dodd-Frank Act and the Consumer Financial Protection Bureau (CFPB), which was created by the act.
In a Monday (July 14) letter addressed to Rep. French Hill, R-Ark., and Rep. Maxine Waters, D-Calif., the trade association said the act and the CFPB have practiced “regulatory overreach.”
Hill and Waters are the chairman and ranking member, respectively, of the House Financial Services Committee.
“From the Durbin Amendment to the creation of a new regulatory regime, credit unions have endured heavy burdens in the wake of the passage of Dodd-Frank,” America’s Credit Unions President and CEO Jim Nussle wrote in the letter.
“In particular, the implementation of a number of Dodd-Frank’s provisions by the Consumer Financial Protection Bureau (CFPB) has proven burdensome and, in many cases, antithetical to the Bureau’s original purpose of leveling the playing field for community financial institutions.”
To help remedy this, the association suggested that the CFPB’s leadership structure be changed from a single director, as it is now, to a five-person, bipartisan commission. This would provide multiple perspectives during the decision-making process, ensure continuity and eliminate the uncertainty that can arise each time a new president takes office, the letter said.
The letter also suggested increased congressional oversight of the CFPB, saying this could be facilitated by subjecting the agency to the congressional appropriations process and appointing an independent inspector general for the CFPB who would be required to testify before Congress once a year.
America’s Credit Unions also called for clarity around the CFPB’s vague statutory authorities, highlighting the unfair, deceptive or abusive acts and practices (UDAAP) standard that the association said has been enforced on a case-by-case basis.
The association also said the CFPB should expand and clarify exemptions for credit unions, improve its use of cost-benefit analysis and small business review panels when considering rules and reform its Civil Investigative Demand (CID) process.
It also called on Congress to repeal Section 1075 of the Dodd-Frank Act, the Durbin Amendment, saying it has been “one of the most harmful provisions of the Dodd-Frank Act to credit unions.”
PYMNTS reported in June that the Durbin Amendment, which capped fees on debit card payments, set in motion a ripple effect that led to banks’ elimination of many of those programs.
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