WASHINGTON-The proposal for a new Consumer Financial Protection Agency and the response by the credit union lobby illustrates, among other things, the different approach being taken by CUNA and NAFCU on a variety of issues.
CUNA, by virtue of the size of its staff and its political muscle as one of the biggest contributors of campaign cash to lawmakers, has climbed on the bus in acknowledgment that the new agency is almost certain to be approved by Congress with jurisdiction over credit union products and services.
NAFCU, which has much less to contribute to lawmakers and is still considered in some circles as a lesser player, continues in its outright opposition to the agency's jurisdiction over credit unions. Its proposal to allow all federal depository regulators, like NCUA, to create their own office of consumer affairs in lieu of being regulated by the new agency, has attracted little support so far, even from the banking lobby that would seem to be natural allies on this issue.
Of course, the NAFCU proposal has attracted one key ally-NCUA-which has proposed its own consumer protection agency. However, the NCUA office is unlikely to reach fruition if Congress passes the consumer protection agency.
In a recent interview, CUNA President Dan Mica described their strategy. He said because Congress is likely to approve the new agency, it is incumbent upon CUNA to try to shape the legislation, rather than oppose it "like some other groups," an obvious reference to NAFCU.
CUNA outlined its position in a recent letter to key lawmakers.
Among the key issues are having rulemaking authority rest with the new agency but examination and enforcement would remain with NCUA and state credit unions regulators; paying for the new agency's operating expenses through federal appropriations; streamlining consumer protection rules and eliminating duplicative regulation; and giving credit unions the ability to tailor products to their members rather than being required to offer a standardized version.
"In order for a CFPA to work, consumer protection regulation must be consolidated and streamlined; it should not add to the regulatory burden of those that have been regulated and performed well, such as credit unions," said Mica in his letter.
NAFCU's position is less nuanced. According to Fred Becker, president of the trade association, credit unions are more regulated than any other financial depository and do not need a new regulatory agency to monitor their activities. He told key lawmakers in the House and Senate that the new structure has the potential of creating a conflict between NCUA, which will remain the arbiter of safety and soundness for credit unions, and the new agency, which will be looking out for consumers foremost.
He said NCUA, because it knows credit unions and already monitors for compliance with consumer laws and regulations, is best equipped to do the job the proposed consumer agency would do, with respect to regulating credit unions' products and services.
