CUNA Shares Information on Credit Card Market with CFPB | Reg CC & Reg D Letter to Fed

CUNA Regulatory Advocacy Report: May 18, 2015
This week’s Regulatory Advocacy Report will bring you up to speed on the following:

  • CUNA Shares Information on Credit Card Market with CFPB
  • CUNA Expresses Concerns with Reg CC & Reg D in Letter to Fed
  • Credit Unions Meet with CFPB in Wisconsin

CUNA Shares Information on Credit Card Market with CFPB

Today, CUNA will be filing a comment letter on the CFPB’s review of the credit card market. The CFPB’s review includes 12 topic areas related to the consumer credit card market. However, last week, the Bureau extended the comment deadline until June 17 for input on four of these areas: online disclosures, grace periods, add-on products, and debt collection. Our letter emphasizes the pro-consumer mission of credit unions, while at the same time stating that “it is reasonable for credit unions to assess appropriate fees and charge appropriate interest rates” for the services they offer.

The CFPB has acknowledged, and we agree, that overly complex disclosures tend to be less effective in informing the consumer about the terms of a financial product. However, we ask the CFPB to continue to look for ways in which to improve disclosures, as they relate not only to the consumer but also to affected financial institutions. We urge the Bureau to be mindful of the regulatory constraints credit unions are currently facing from the CFPB and other federal financial regulators.

CUNA Expresses Concerns with Reg CC & Reg D in Letter to Fed

In a comment letter filed on Wednesday, CUNA reiterated concerns with withdrawal or transfer limits on savings accounts and proposed changes for remote deposit capture. The letter was sent to the Federal Reserve Board, Federal Deposit Insurance Corporation, and Office of the Comptroller of the Currency,which sought feedback as part of their Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) review. NCUA did not participate in this joint EGRPRA review; earlier this year, NCUA voluntarily conducted its own EGRPRA review.

Share Insurance Coverage for IOLTAs Proposal

As stated in our letter, Reg D continues to burden credit unions and consumers by imposing reserve requirements on depository institutions. Specifically, CUNA takes issue with the transaction limit set on savings accounts, only allowing depositors to making six transfers or withdrawals per month. This limit can lead to rejected transactions and potential nonsufficient funds fees on consumer-members. Our letter emphasizes the importance of regulatory relief for credit unions; credit unions are devoting time and resources to comply with the policy that imposes an arbitrary limit on transfers rather than focusing on meaningful compliance issues. As discussed in the letter, CUNA supports a GAO study of the Reg D limit, which we believe will conclude that Reg D is not necessary for credit unions.

Our letter reiterates concerns we’ve shared previously regarding the Fed’s proposed changes to Reg CC, which pertains to remote deposit capture (RDC). The proposal provides two alternate frameworks for return requirements to encourage institutions that currently request paper returns to transition to electronic returns. As noted in our Reg CC letter, credit unions have concerns that the proposed changes would not only increase risks for all institutions offering RDC but could also result in unintended consequences, such as potential reductions in RDC services for consumers and businesses.

Credit Unions Meet with CFPB in Wisconsin

Last week in conjunction with a CFPB field hearing held in Wisconsin, credit union representatives held a roundtable meeting with Elizabeth Ellis, CFPB deputy assistant director office of financial institutions and business liaison.

The Wisconsin Credit Union League coordinated the meeting held at the West Allis, Wis., branch of Empower CU. Credit unions and CUNA worked with the league to prepare for the meeting.

The credit unions took the opportunity to tell Ellis they were not responsible for the fallout that resulted from the financial crisis, yet they have been hit with a wave of regulations that endangers the close relationships they hold with their members. The group addressed many relevant topics including the cost of regulation, mortgage lending, and small dollar lending.

The participants urged the CFPB to recognize that credit unions provide all the products and services they do because of who they are: member-directed financial cooperatives. CUNA reported on the meeting.

Current CUNA Regulatory Calls to Action

  • CFPB Seeks Input on Credit Card Market(comments due by May 18)
  • CFPB Requests Comments on Consumer Complaint Database(comments due by May 26)
  • NCUA Seeks Comments on 2015 Annual Regulatory Review(comments due by August 5)

To write directly to regulators click here.

For other items of interest, visit CUNA’s Regulatory Advocacy page.

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