America’s Credit Unions is concerned by the CFPB’s structure and several recent actions, President/CEO Jim Nussle wrote to a House Financial Services subcommittee ahead of its hearing on CFPB transparency.
“[G]iven the broad authority and awesome responsibility vested in the CFPB, a five-person commission has distinct consumer benefits over a single director. Regardless of how qualified one person may be, including the current leadership of the agency, a commission would allow multiple perspectives and robust discussion of consumer protection issues throughout the decision-making process,” Nussle wrote.
“We believe the Bureau currently lacks sufficient accountability and transparency mechanisms as it relates to its funding, which further exacerbates the challenges in assessing its financial and operational performance,” he added. “As such a large agency overseeing all aspects of the financial sector, we believe that the Bureau’s funding should be overseen and established by Congress.”
Nussle also noted how this non-transparent structure leads to problematic CFPB rulemakings, outlining in the letter how the CFPB’s:
- Final rule on credit card fees “demonstrates a lack of understanding as to how consumers and financial institutions utilize credit services,” and America’s Credit Unions supports efforts to nullify the rule via the Congressional Review Act;
- Initiative to label standard fees as “junk fees” will result in credit unions no longer being able to offer value-based services and products to vulnerable communities;
- Proposed overdraft rule inadvertently undermines the ability of smaller financial institutions like credit unions from offering overdraft protection programs;
- Rulemaking on small business data collection threatens to harm both small businesses and small financial institutions; and
- Section 1033 rulemaking contributes “significant uncertainty” about the fraud vulnerabilities of new data sharing mechanisms.
