Conference Debate: Is the CFPB CUs’ Friend or Foe?
WASHINGTON—No issue at this year’s GAC was more polarizing than the new Consumer Financial Protection Bureau. Speakers, particularly politicians, were either completely against it or completely for it, depending upon which party they represented.
Rep. Jeb Hensarling (R-Texas) told a Wednesday morning general session crowd that rarely has an agency had so much potential to harm individual liberties. Not only was the appointment of Director Richard Cordray, done without Senate confirmation, “unlawful and unconstitutional,” the bureau will apply subjective judgment in declaring legal activities to be fraudulent.
In fact, the CFPB will even hire psychology and marketing experts to provide insight into how and why consumers make purchasing decisions.
Congress has set boundaries for the CFPB, Sokolov said, but it also gave the agency enough exceptions to avoid unintended consequences when crafting new regulations. The CFPB’s examination exemption to credit unions with fewer than $10 billion in assets is a good example of that flexibility in action, he said.
“As we know, there are some very bad overdraft protection programs out there, but most credit unions work hard with members to provide them with flexibility so their items won’t bounce,” she said.
Panelist Erin Mendez, executive vice president and chief operating officer at the $9 billion SchoolsFirst FCU and CUNA Council Forum Chair, said she is focusing on helping credit unions know what to expect from the CFPB. Fortunately, because the new agency will focus on non-deposit organizations that provide financial services like payday lending, and on institutions with more than $10 billion in assets, credit unions will mostly be dealing with new disclosures.