ALEXANDRIA, Va. – In an effort to preempt plans to bring credit unions under a new Consumer Financial Protection Agency, NCUA Chairman Michael Fryzel yesterday proposed creating the agency’s own consumer protection office.
NCUA currently has authority over products and services offered by credit unions by rarely, if ever, determines whether they comply with consumer laws and regulations, leaving that to other agencies such as the Federal Trade Commission of the Securities and Exchange Commission.
The new NCUA office would monitor compliance with mortgage laws, credit card rules and regulations and disclosures on products and services sold by credit unions.
"The new office will consolidate existing consumer protection functions already administered by NCUA and would create a liaison relationship with relevant external parties, such as the Consumer Financial Protection Agency, if that proposed entity becomes a reality," stated Chairman Fryzel, of President Obama’s proposal for a new agency with jurisdiction over all financial products and services. The proposed agency would have broad jurisdiction regarding credit, savings and payment products.
"While NCUA has always placed a high priority on the enforcement of consumer regulations, and credit unions themselves have a strong track record of pro-consumer conduct, it is important that the highest level of compliance with these essential laws be maintained at all times. The creation of a dedicated Consumer Protection Office will make NCUA supervision of consumer protections even more efficient and effective, and will further underscore the priority of this function," Fryzel said.
Fryzel's proposal comes as some in the credit union lobby are urging Congress to exempt credit unions from the new consumer agency. NAFCU has suggested that the new agency not have jurisdiction over federally insured depositories, which already monitored by federal agencies like NCUA, the FDIC and Federal Reserve.
