State-chartered credit unions already have a myriad of federal and state advertising regulations to comply with and therefore shouldn't have to comply with proposed Federal Trade Commission rules aimed at nonbank institutions.
That's the argument made by CUNA and NASCUS in separate letters to the FTC.
The agency should "focus the proposed rule on filling the regulatory gaps and clarifying the expected conduct of entities lacking the robust regulatory framework of state-chartered credit unions," NASCUS President/CEO Mary Martha Fortney wrote the agency.
She noted that the sum total of existing laws and regulations, including the Real Estate Settlement Procedures Act and the Home Mortgage Disclosure Act, "proscribe the very acts and practices covered by this proposal."
Fortney added that the FTC has said that the regulations should apply to only nonbank financial companies. She urged the agency to ensure that credit unions be considered banks for purposes of the rule.
The proposed rule would prohibit "any person from making any material misrepresentation in any commercial communication regarding any term of any mortgage credit product." For example, it bans misrepresentations about the annual percentage rate or periodic rate.
CUNA Senior Assistant General Counsel Jeffrey Bloch wrote that while the requirements of the proposed rule itself may not be overly burdensome, they would add to the cumulative regulatory burdens that affect state-chartered CUs.