WASHINGTON A powerful credit-union trade group on Tuesday laid out its conditions for supporting the proposed Consumer Financial Protection Agency.
Creditunions and community banks, which hold considerable sway on CapitolHill, are being courted by the Obama administration to support the newagency. Without credit union and small bank support, it could bedifficult to push the proposal through Congress.
Credit Union National Association President and Chief Executive Dan Mica, in a letter to House Financial Services Chairman Barney Frank, D-Mass., said his group could support the agency if certain issues were addressed.
"Inorder for a CFPA to work, consumer protection regulation must beconsolidated and streamlined; it should not add to the regulatoryburden of those that have been regulated and performed well, such ascredit unions.
The proposed agency would have broad authority towrite rules governing a host of financial products and to ban certainfinancial-industry practices. Enforcement of all federalconsumer-protection statutes would reside with the new agency, ratherthan existing bank regulators, under the administration's proposal.
Thecredit-union group said it would support the proposal if examinationand enforcement remained with the industry's current regulator, the National Credit Union Administration. Rule-making could rest with the CFPA, the group said.
Italso requested that the new agency's budget be funded entirely throughfederal appropriations. The administration has proposed a mix ofappropriated funds as well as fees from the banking and credit-unionindustries.
The credit-union group wants the CFPA to haveauthority to preempt state laws - a tall order for consumer advocatesand others who want states to have the power to go further than theagency.
And the group wants leeway to tailor its products to itsmembers, rather than being required to offer "plain vanilla" productsthat other lenders would be required to offer by the agency.
"Anymandate that a generic product must first be offered before one thatwould work better for the consumer would increase costs for creditunions and could potentially confuse the members," Mica wrote.