CFPB oversight should hold nonbanks to same standards as credit unions

America’s Credit Unions’ Andrew Morris wrote to the CFPB in response to its proposed rule designating certain nonbanks offering “general-use digital consumer payment applications” as larger participants subject to the bureau’s supervisory jurisdiction. Morris offered the association’s general support for the rule, in addition to outlining several recommendations.  

“Consumers benefit from innovation that offers new delivery channels and products as well as innovations to traditional products and credit unions want to ensure that financial products and services available from nonbanks offer the same protections as those offered by regulated entities,” wrote Morris.  

In addition, he recommended:  

  • The new oversight should serve to hold nonbanks to the same standard as credit unions but should not increase the burden on credit unions that may have relationships with these entities;  
  • The CFPB should also consider the potential merits of examination and supervision of nonbank covered persons, regardless of size, to determine whether the proposed thresholds for determining larger participant status are sufficient to address broader consumer protection concerns; and  
  • The bureau should conduct periodic reviews to determine whether the definitional criteria are appropriately tailored.  

America’s Credit Unions will continue to engage the bureau and fight for a level playing field.    

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