WASHINGTON – NAFCU called on key senators to exempt credit unions and other insured depositories from the proposed Consumer Financial Protection Agency, even as senators from both parties were lining up behind the Obama administration proposal.
NAFCU told leaders of the Senate Banking Committee just before yesterday’s hearings on the consumer agency that credit unions should not be dragged into the growing burden of laws and regulations meant to address the abuses of the mortgage and other markets. NAFCU told the leaders that products and consumers credit unions provide their members, such as mortgages, insurance and investments, are already overseen by NCUA and creation of a new agency would pose an additional layer of regulations.
Members of the panel, both Democrat and Republicans appeared poised yesterday to endorse the President’s proposal as is. "If we’re going to have this Consumer Financial Protection Agency–which I support–we’re going to have to do it across the spectrum of consumer financial products. Otherwise, we would be doing a disservice to the consumer," said Mel Martinze, the Republican Senator from Miami.
NAFCU President Fred Becker, in a letter to Sen. Chris Dodd, the Democratic Chairman, and Richard Shelby, the ranking Republican on the panel, the new agency could create regulatory conflicts with NCUA, which could be put in a position of having to act contrary to the safety and soundness of a credit union in enforcing a consumer statute.
Instead of the new agency, NAFCU proposed having NCUA and the banking regulators create their own consumer affairs offices to monitor the institutions they already oversee. "Such an approach will ensure that those regulating the consumer issues at the financial institutions have knowledge of the institutions they are examining," said Becker.
NCUA has also proposed creating a consumer affairs office. The proposal must be approved by the NCUA Board.
