CUNA Regulatory Advocacy Report

CUNA Sends Letter to CFPB Regarding Overdraft Order

Last week, CUNA CEO Jim Nussle, sent a letter to the CFPB expressing concerns about a November 2014 order issued to major credit union service providers concerning overdraft protection. The letter expressed deep concerns that the Order has caused Fiserv, and potentially other service providers, to incur costs that will be passed on to credit unions, and ultimately their members. In a letter to its clients, Fiserv stated, “While the CFPB may be seeking efficiency and data uniformity by issuing this Order to large processors like Fiserv rather than thousands of individual financial institutions, this approach creates significant expense for us. The CFPB asserts it is within their statutory power to impose these costs on the industry they regulate rather than fund them from their own budget, and to that end we are tracking our costs carefully with the potential that these will be passed through to our hosted (ASP) account processing clients.”

The letter CUNA sent urged the CFPB, as it contemplates whether new rules are needed for overdraft protection programs, to continue to study overdraft so it can gain a better understanding of the benefits consumers derive from this product and the differences between the overdraft products offered by credit unions versus other financial institutions. However, it also noted it is important that the CFPB conduct its research of overdraft in a way that does not burden credit unions, who continue to struggle with a myriad of elevated compliance and regulatory costs.

The letter closed by urging Director Cordray to take any corrective actions necessary to assure credit unions are not unfairly impacted by the Bureau’s recent order concerning overdraft. Every dollar a credit union spends on issues related to unnecessary regulation is a dollar that is not used for the benefit of its members.

CFPB Responds to Concerns about Implementing TILA-RESPA

CUNA has engaged in robust advocacy efforts on behalf of our members regarding the new TILA-RESPA mortgage disclosure and timing rules that go into effect on August 1, 2015. In particular, CUNA urged the CFPB in meetings and in writing to provide a “hold-harmless” period for compliance and liability on the new rules until January 2016, for credit unions that make good faith efforts to comply. CUNA and other trade associations sent a letter to the CFPB on this matter in March 2015. CUNA also urged Members of Congress to encourage the CFPB to provide this “hold-harmless” period. It supported legislation, H.R. 2113, which would allow industry stakeholders to make good faith efforts with compliance with the new rules until the end of the year without fear of enforcement actions or lawsuits.

On June 3, the CFPB responded to these concerns by stating it will be “sensitive to the progress” made by industry that have made good faith efforts to comply with the rules on time. The CFPB did not expressly provide a grace period or hold-harmless period for compliance and liability until the end of the year. As such, CUNA will continue to advocate to the CFPB that more unambiguous relief is necessary, and we will also continue to push legislation for this change.

Current CUNA Regulatory Calls to Action

  • CFPB: Request for Information on Certain Aspects of Credit Card Market (comments due by June 17)
  • Dept. of Education Seeks Comments on its Student Proposal (comments due by July 2)
  • Federal Reserve Seeks Comments on its Same-Day ACH Proposal (comments due by July 2)
  • Dept. of Labor: Proposed Rule Defining “Fiduciary” (comments due by July 6)
  • CFPB Requests Information on Student Loan Servicing (comments due by July 13)
  • NCUA: Proposal on Share Insurance/IOLTA Rule (comments due by July 13)
  • NCUA: Request for Comments on 2015 Annual Regulatory Review (comments due by August 3)

To write directly to regulators click here.

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

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