WASHINGTON -- The top Treasury Department official on credit unions said that the proposed agency to regulate consumer financial products will give credit unions a more stable regulatory environment in which to operate.
Such an agency will foster a "more predictable regulatory environment" in which it will be "easier to build a sustainable business," Assistant Treasury Secretary Michael Barr told attendees at CUNA's Governmental Affairs Conference.
He said the proposed Consumer Financial Protection Agency will mostly affect big banks and nonbanks. He noted that now the government spends 15 times more money regulating banks and credit unions than on nonbanks, even though there are five times as many nonbanking institutions.
The CFPA "will go a long way toward correcting this misallocation of resources," said Barr, who is the assistant secretary of the treasury for financial institutions.
Several Republican lawmakers who addressed the conference took issue with Barr's assessment of the benefits of a CFPA.
Rep. Edward Royce (R-Calif.) said it would be an unnecessary additional regulatory burden that attempts to solve a problem that isn't there, because credit unions don't engage in predatory consumer practices. Royce is a member of the House Financial Services Committee and one of the strongest supporters of credit unions on Capitol Hill.
Rep. Spencer Bachus (R-Ala.), the top GOP member of that panel, said at a time when the economy needs to create new jobs, Congress shouldn't take actions that will hamper that effort.
Last year, the House passed a regulatory restructuring bill that includes a CFPA. The Senate Banking Committee is working on legislation on the subject though the fate of the CFPA in that chamber is unclear. All Republicans on the panel oppose the CFPA as do some Democrats. Though the Democrats control the Senate 59-41, the rules of that chamber permit the minority party to have significant input on the outcome of legislation.