CFPB and NCUA rulemaking impacting credit unions looms
Published by: Sean Brown
February 8, 2022 | Regulatory
After several years of common-sense relief, the regulatory pendulums at the National Credit Union Administration (NCUA) and Consumer Financial Protection Bureau (CFPB) are seemingly swinging back into the opposite direction with rulemaking opportunities that may impact your credit union’s ability to serve members efficiently and effectively. Here’s a regulatory rundown of what your credit union can anticipate on the horizon so you can prepare to best advocate for your members.
NCUA Succession Planning
The NCUA Board announced it will issue a proposed rule requiring all federally-charted credit unions (FCUs) boards of directors to establish and adhere to a succession plan at their discretion. Credit unions operate best when they are empowered through regulation rather than prescribed requirements that do little to educate, guide, and assist cooperative service, which is the message the League will communicate through a formal comment. All comments will be due within sixty (60) days upon the proposal’s publication in the Federal Register.
CFPB “Junk Fees”
The CFPB issued an overly broad request for information (RFI) related to fees that are not subject to competitive processes to assist the agency and policymakers in creating fairer, more transparent, and competitive consumer financial markets. Credit unions remain well-regulated financial institutions in an increasingly competitive market, so any additional compliance burdens could impact your credit union’s member service offerings and profitability. The League is cueing up a comment letter and will call you and your credit union to action soon. All comment submissions are due no later than March 31.
CFPB Buy Now, Pay Later (BNPL)
The CFPB recently issued a series of orders to five companies offering BNPL credit. The orders to collect information on the risks and benefits of these fast-growing loans went to Affirm, Afterpay, Klarna, PayPal, and Zip. The CFPB is expected to publish aggregated findings with future rulemaking possible to protect consumers from potential predatory practices. Credit unions already comply with stringent lending requirements and need to compete with fintechs in an equal regulatory environment. With a recent request for comment seeking more specific information from the industry at large, the League will provide comment on fairness and transparency. All comments are due no later than March 25.
To learn more about these advocacy opportunities and how to get involved, reach out and connect with the League’s Director of Regulatory Affairs, Sean Brown.
Contact Sean Brown for questions or assistance.