Cordray: CFPB Goals Can Balance Soundness Concerns

While the Consumer Financial Protection Bureau (CFPB) is not specifically required to take safety and soundness into account when taking regulatory action, the agency is working with other financial regulators to ensure that its stated goal of protecting consumers strikes a balance with safety and soundness concerns, CFPB Director Richard Cordray said recently.

Cordray said that he plans to work toward reducing the regulatory burden for credit unions by creating a Credit Union Advisory Panel. He said he realizes that credit unions—as well as community banks—had “nothing to do” with bringing on the financial crisis and that their consumer-oriented business model is the business model that the CFPB strives for.

The CFPB is also planning to convene Small Business Regulatory Enforcement Fairness Act (SBREFA) panels in the spring, Cordray said. SBREFA panels, which are charged with making recommendations to the CFPB on how to reduce the regulatory burden on small entities, would be comprised of one representative each from the CFPB, the Office of Management and Budget, and the U.S. Small-Business Administration’s Office of Advocacy.

The general progress of the CFPB was also addressed during the hearing, with Cordray saying the agency would not set prices, limit the size of banks or ban any specific financial products.

However, Cordray added that the CFPB is working to ensure a level playing field for the various financial institutions that offer consumer finance products such as payday loans, prepaid debit cards, mortgages, and student loans.

Click here to read more about the hearing.


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Posted in Compliance News.