America’s Credit Unions (AmCU) raised sharp concerns this week over a CFPB proposal that would change how nonbanks are designated for supervision. In comments filed Thursday, AmCU Regulatory Affairs Counsel Tyler Maron said the proposal risks tilting the playing field further against credit unions, which are already subject to extensive oversight.
“As it stands, credit unions are extensively supervised by two regulatory agencies while non-depository institutions like fintech companies are not,” Maron wrote. “Consequently, credit unions would be subject to far more compliance costs and a massive competitive disadvantage.”
The CFPB’s proposal would shift the current statutory standard, focusing on conduct that “poses risks to consumers”, to a requirement of “high likelihood of significant harm.” AmCU argued that narrowing the threshold could exempt nonbank firms from scrutiny, even when they pose real risks.
Instead, the trade group urged the bureau to retain the original Dodd-Frank language and publish a clear, factor-based rubric for assessing nonbank risks. Suggested indicators included abnormal complaint volumes, repeat enforcement by state attorneys general or the Federal Trade Commission, material control over consumer funds or data, and outsized charge-off or refund ratios.
AmCU also called for greater coordination between the CFPB, prudential regulators, and state supervisors to ensure consistent oversight across credit unions, banks, and fintechs offering functionally equivalent products.
Separately on Thursday, the CFPB finalized a rule rescinding a 2022 requirement that supervisory designations be made public. Reverting to a 2013 policy, the Bureau said confidential treatment will prevent reputational harm and unwarranted speculation about supervised entities.
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