DCUC Engages House Financial Services Committee for CFPB Reform

WASHINGTON, D.C. — The Defense Credit Union Council (DCUC) today submitted recommendations to House Financial Services Committee Chairman French Hill and Ranking Member Maxine Waters in response to the Committee’s discussion draft proposing significant reforms to the structure, rulemaking, supervision, and enforcement authorities of the Consumer Financial Protection Bureau (CFPB). ​

​DCUC expressed support for the Committee’s effort to create a more accountable, transparent, predictable, and durable consumer financial regulatory system while urging lawmakers to recognize the unique not-for-profit, cooperative structure of credit unions. 
 
“Strong consumer protection and sensible regulation are not competing objectives,” says Anthony Hernandez, DCUC President/CEO, Ret. U.S. Air Force Colonel. “Credit unions have built their model around serving their members, and defense credit unions take that responsibility particularly seriously because they serve the men and women of our Armed Forces, veterans, and military families. Congress has an opportunity to build a CFPB framework that aggressively protects consumers from bad actors without imposing unnecessary, duplicative burdens on responsible credit unions. That balance will ultimately produce a stronger financial system and better outcomes for consumers.” 
 
DCUC’s recommendations addressed each of the five titles of the Committee’s discussion draft, while also calling for a dedicated and independent CFPB Inspector General; comprehensive economic analysis of proposed regulations affecting credit unions and community financial institutions; stronger small-business impact reviews; and mandatory reconsideration of CFPB regulations every five years. 
 
DCUC also recommended that Congress establish clearer boundaries around the Bureau’s use of its unfair, deceptive, or abusive acts or practices authority.  
 
“Credit unions should know what the rules are before the government starts enforcing them,” Jason Stverak, DCUC Chief Advocacy Officer adds. “Enforcement should punish violations of established law. It should not be the mechanism government uses to create new law. Regulators have an obligation to provide clear rules, reasonable expectations, and a predictable process.” 
 
In DCUC’s letter to HFSC leaders, Stverak noted that good-faith compliance should matter when regulators determine penalties.  
 
“When a credit union discovers an error, voluntarily reports it, makes affected members whole, cooperates with its regulator, and fixes the underlying problem, those actions should meaningfully reduce potential penalties. Civil money penalties should also be proportionate to the actual conduct and consumer harm involved,” says Stverak. 
 
“For credit unions, reform should produce a straightforward result: clear rules established before  
enforcement, requirements proportionate to institutional size and risk, one primary examiner, meaningful consideration of good-faith compliance, and a regulatory system that protects consumers without unnecessarily restricting access to responsible financial services,” DCUC’s letter concluded. 
 
Learn more about DCUC’s advocacy on behalf of credit unions at the CFPB here.