‘A Cop on the Beat’: New Consumer Financial Protection Bureau Shows Hand
The new Consumer Financial Protection Bureau on Tuesday provided more details of how it plans to examine credit unions and banks.
The examination of large financial institutions – including credit unions of $10 billion in assets or larger – “will be an ongoing process of pre-examination scoping and review of information, data analysis, onsite examinations and regular communication with regulated entities, prudential regulators, and as well as follow-up monitoring,’’ the new agency said in a statement.
Elizabeth Warren, who came up with the idea for the bureau and is coordinating its setup, said in the statement that it “will be a cop on the beat – examining banks and protecting consumers.”
The bureau, which officially begins operation on July 21, will have the power to examine the consumer aspects of the operations and products of the $44 billion Navy Federal FCU, the $22 billion State Employees’ Credit Union of North Carolina and the $15 billion Pentagon Federal FCU.
All other credit unions are subject to the regulations issued by the CFPB but enforcement will be by either the NCUA or their state regulator, depending on their charter.
According to its policy statement the bureau plans to use its examinations to determine whether the financial institution is able to “detect, prevent, and remedy violations that may harm consumers.”
The bureau plans to look at how institutions develop, market, sell and manage the products they sell.
The bureau said it will also conduct fair lending reviews and on June 29 its new Office of Service Member Affairs director, Holly Petraeus, told a NAFCU gathering that special attention would be paid to protecting military members and their families.
Credit union leaders have expressed their concern over new regulations imposed on the industry, while Republican lawmakers have been working to weaken the new agency’s powers and have promised to filibuster the nomination of whoever is selected by President Barack Obama to lead it.