ALEXANDRIA, Va. – Two months after it opened an office of consumer protection, NCUA is keeping the existence of the new office very quiet, even as talks heat up in Congress over creating a new cross-agency directorate to address consumer issues at credit unions, banks and other financial services providers.
The creation of the new consumer office with an annual budget of $1.5 million and staffing of three full-time NCUA employees was publicly lauded by NCUA after it was approved by the NCUA Board on Nov. 19.
"This would be the first time that NCUA has dedicated staff to help consumers achieve financial literacy," NCUA Chairman Debbie Matz said, explaining the new office will be divided into two divisions – one focusing on consumer protection and the other on consumer education and access. A long-time NCUA executive, Kent Buckham, who had headed the office of corporate credit unions until the fall of 2008, was assigned director of the new consumer office, which opened on Jan. 1.
But NCUA has been closed-lipped since then, refusing all requests for information and for an interview about the new office and declining even to issue a news release announcing its existence.
The federal regulator apparently is keeping the creation of the new office quiet so as not to attract criticism from Congress, where lawmakers are working to create their own consumer protection scheme, according to several sources. One source suggested that some on Capitol Hill could see creation of an independent NCUA effort on consumer protection just as the congressional debate is starting to heat up as undermining Congress’ proposal.
Late last year, the House passed a financial services bill that would create a Consumer Financial Protection Agency supported by the Obama administration. But negotiators in the Senate have decided against creation of a new independent bureaucracy and instead are developing a proposal that would house the new consumer protection initiative in an existing financial regulator, either the Treasury Department or the Federal Reserve.
But yesterday a bipartisan compromise on placing the consumer agency inside the Treasury or Fed appeared to be falling apart with both Democrat and Republican senators expressing doubt on the independence of such a structure.
Consumer groups also were dismissive of the idea, saying that the current regulators, particularly the Fed, were not attentive enough to consumers during the financial crisis, turning their eyes to the proliferation of questionable consumer products, such as subprime mortgages and hidden credit card fees.
