Chairman’s Corner
CFPB DIRECTOR ANSWERS KEY QUESTIONS
ON NCUA WEBINAR
Credit union officials often ask me how the
Consumer Financial Protection Bureau (CFPB)
will affect their credit unions.
Because the best person to ask is CFPB’s new
presidentially appointed director, Richard
Cordray, I invited him to visit NCUA as our
special guest for my first Town Hall Webinar
of 2012. I was honored that Director Cordray
graciously accepted this opportunity to answer
credit union officials’ questions directly.
How will CFPB approach checking
account disclosures and
overdraft guidance?
Director Cordray: Our “Know Before You
Owe” project is a general approach… We think
that the markets will be better if we streamline
disclosures… and avoid the density and
confusion of the forms that surround financial
products. That’s a profound principle that we’re
operating on…
More than 2,100 participants registered for the
live webinar, and we hope many more
stakeholders will listen to the recording or read
the transcript posted on www.ncua.gov. If you
haven’t had a chance, here are highlights of
Director Cordray’s answers to key questions:
Debbie Matz
Chairman
Will CFPB ease the burden of new
consumer regulations on credit
unions under a certain asset size?
Director Cordray: That is something we’re
going to try to be sensitive to. In order to help
us be sensitive to that, we need to hear from
you in terms of why it would matter what
threshold we set.
What steps is CFPB taking to regulate
check cashers, payday lenders, and
mortgage servicers?
Director Cordray: We have some concerns about potential violations of the
law, and we’re looking generally at the business model of payday lending…
There are also some legitimate concerns about other products that serve
that niche—including car title loans, pawn brokers, some of the new
financial institution models... It may lead to some rulemaking; it may lead
to some other actions. We will be examining payday lenders and mortgage
servicers. We’ve put out supervision modules for how we’re going to
approach exams of both… And we have enforcement authority. So it’s on
us to make sure that what’s being done so far and what we add to that cleans
up the problems…
How will CFPB process rules that
must be finalized in order to comply
with the Dodd-Frank Act?
Director Cordray: We have statutory deadlines
on five different mortgage rules… And I believe
we will hit all of those deadlines... On all of
those rulemakings, we will have considerable
notice and comment periods. There will be a
lot of opportunity for people to see what
directions we think we’re going in…
Do you feel that financial fees should be set by statute, by
regulation, or by the marketplace?
Director Cordray: Under our statute, we are not permitted to set a cap on
interest rates or to price financial products. I’m comfortable with that,
because there are lots of ways in which we hope that our work will improve
the clarity, consistency, and functions in the markets...
Will CFPB offer guidance on
Regulation Z to clarify how credit
unions can offer multi-featured
open-ended lending?
Director Cordray: This is a new issue to me...
We will find out more about it, and then we
will give it some thought, and we’ll have some
discussions with all of you and others to try to
figure out what, if anything, should be done…
How will you select CFPB’s Credit Union Advisory Council?
Director Cordray: We want it to be big enough so that we get a variety of
points of view and experience, but we want it to be small enough that it can
actually function and that people feel that they can speak up… We are going
to be soliciting different points of view on who should be members, but the
criteria for us will be to get a diversity of perspectives and representation
around the country.
NCUA shares CFPB’s commitment to consumer protection. If you have
questions about our role, contact NCUA’s Office of Consumer Protection at
703-518-1140 or OCPMail@ncua.gov.
