Senators Push CFPB to Exempt Credit Unions

In March, three-quarters of the U.S. House of Representatives signed a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray asking him to exercise authority granted him by Dodd-Frank to exempt credit unions from certain CFPB rulemakings.

Now, in July, nearly three-quarters of U.S. Senators have followed suit. As the fifth birthday of the CFPB approaches, a bipartisan group of 70 U.S. Senators, led by Sen. Joe Donnelly (D-Indiana) and Sen. Ben Sasse (R-Nebraska), have petitioned Cordray to exclude credit unions from complete CFPB regulatory oversight.

Credit unions have long sought relief from the CFPB’s regulations, which the credit unions maintain are aimed at “bad actors” that caused the financial crisis.

“Congress and federal regulators have long taken the approach that credit unions and community banks should be treated differently from the largest financial institutions and non-bank lenders,” the Senators wrote. “It is our hope that the CFPB also takes this approach and considers the impact of its rulemaking on smaller financial institutions and consumers.”

Critics of Dodd-Frank have long maintained that its “one size fits all” approach to regulation that was intended for Wall Street has had an adverse effect on Main Street. In the letter, the Senators urged the Bureau to tailor its financial rules to match the role of community banks and credit unions around the country.

“We greatly appreciate Senators Donnelly and Sasse for their bipartisan leadership, and all of the senators who signed the letter. Their consideration of the tremendous regulatory burden facing today’s credit unions is invaluable,” said Dan Berger, president and CEO of the National Association of Federal Credit Unions. “The solid support by the majority of Senators, in conjunction with the 329 House members who sent Director Cordray a similar letter earlier this year, unequivocally affirms Congress’ intention for CFPB to use its Dodd-Frank Act exemption authority to better tailor its rules to credit unions.”

Click here to view a copy of the letter on Donnelly’s website.