LAS VEGAS The Consumer Financial Protection Bureau’s mission to protect consumers is a “great one,” but Michael Benoit says the “problem” is the manner in which the CFPB is carrying out its business.
“The CFBP is a new kind of regulator, and it will be a work in progress for some time,” Benoit said during CU Direct’s 2013 Lending Conference here. Benoit is a partner in Washington, D.C.-based Hudson Cook LLP, a law firm that specializes in consumer financial services. “The CFPB has a broad reach that is unprecedented, and it has a big budget last year was $550 million.”
Benoit said credit unions need to beware of an aspect of the CFPB’s intent that has garnered little attention with so many other rules coming out of the Bureau. He said the CFPB will treat all third-party service providers as if they are credit union employees if the vendors violate any CFPB directive. “All credit unions need to have clear expectations for compliance written into contracts. Any action or inaction that breaks any CFPB rule, the credit union is responsible.”
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