WASHINGTON – Two lawmakers introduced an amendment yesterday to the bill to create a Consumer Financial Protection Agency which would exempt smaller banks and credit unions from the new agency’s oversight.
The amendment, expected to be voted today during a drafting session for the bill, would exempt banks under $10 billion in assets and credit unions under $1.5 billion from the new agency’s authority.
"Most community banks and credit unions did not take advantage of consumers the way some others did," said Rep. Brad Miller, one of the sponsors of the amendment. "They have a valid argument that separate examinations by CFPA would double their administrative burden. CFPA can still take over enforcement if any bank, no matter what size, violates consumer protection laws."
But the credit union lobby is not supporting the bid, which they say could divide the industry.
"We have concerns about the language because it would divide credit unions by asset size, setting a different standard for credit unions that are deemed large and small," said Ryan Donovan, senior lobbyist for CUNA.
Dan Berger, chief lobbyist for NAFCU, called the proposal a step in the right direction, but not one supported by NAFCU. "While well-intended, the amendment would impose an arbitrary asset limit on credit unions, one that is considerably lower than the $10 billion limit proposed for banks and thrifts. At the very least, credit unions should be given parity with other financial institutions," Berger said.
The two credit union lobby groups appear to be taking different approaches on the bill.
Donovan said CUNA believes that a credit union’s prudential regulator, either NCUA or a state supervisor, should have the authority to examine and enforce consumer protection regulation for credit unions.
NAFCU’s Berger said they will continue to urge Congress to allow NCUA and the banking regulators to create their own office of consumer protection and exempt all federally insured institutions from the new consumer agency. "We continue to push for a full exemption from this costly and unnecessary regulatory burden for credit unions with oversight by the NCUA," he said.
