House Financial Services Chairman Jeb Hensarling's revised Dodd-Frank overhaul bill abandons the idea of converting the CFPB into a five-member commission – a plan consistently advocated by credit union trade groups.

Instead, the plan calls for the CFPB to be governed by a single director with diminished powers.

However, NAFCU and CUNA remain divided over whether the NCUA would operate more effectively under a five-member board Hensarling proposed last year, or under a three-member board he now appears to favor.

Hensarling has outlined his proposed changes to the Financial CHOICE Act he introduced last year in a memo to his “Financial Services Leadership Team.”

Those modifications include the NCUA board and CFPB changes.

NAFCU continues to support a three-member NCUA board, said Carrie Hunt, the organization's vice president of governmental affairs and general counsel.

She said that there would be additional costs to credit unions if the number of board members increased, adding that the board always has had robust debates with the three members.

“I don't necessarily think adding two voices does anything to improve that debate,” she said.

On the other hand, CUNA officials believe that there must be continuity on the board, as terms expire and members take other jobs, said Ryan Donovan, CUNA's chief advocacy officer. That continuity would be enhanced if the board were expanded to five members, he said.

Donovan said, however, that the number of members on the NCUA board is a much lower priority than changes at the CFPB.

“We think a commission is common sense,” Donovan said, in discussing the powers that a single director has. “This isn't rocket science.”

NAFCU also supports a commission, Hunt said, adding that NCUA always has been an effective regulator of credit unions. She said that NAFCU questions the need for the CFPB to have any regulatory power over credit unions.

Donovan said that Hensarling must be cognizant of what he can get through his committee, and then through the House and Senate, adding that the chairman's proposal is simply an opening move in a larger debate.

He said most members of Congress believe that some change is needed at the CFPB and cited a letter signed by the clear majority of House members and senators last year pushing the agency to better tailor its rule-making to consider the size of the financial institution.

Instant Insights /

CU Trades Continue Support for CFPB Commission

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