On February 28, 2017, B. Dan Berger, President and Chief Executive Officer of the National Association of Federally-Insured Credit Unions (the “NAFCU“), urged regulatory relief for credit unions in a letter submitted to the Secretary of the Treasury, Steven Mnuchin, in his capacity as Chairman of the Financial Stability Oversight Council (the “FSOC”), the voting members of which also include the Chairman of the Board of Governors of the Federal Reserve System, the Comptroller of the Currency, the Director of the Consumer Financial Protection Bureau (the “CFPB“), the Chairman of the Securities and Exchange Commission, the Chairperson of the Federal Deposit Insurance Corporation, the Chairperson of the Commodity Futures Trading Commission, the Director of the Federal Housing Finance Agency, the Chairman of the National Credit Union Administration (the “NCUA“) and an independent member with insurance expertise.

The letter asserted that credit unions have been “improperly ensnared in a regulatory net that was not intended for them” and emphasized that Dodd-Frank and the CFPB were “designed to curb the bad practices of bad actors” as opposed to “credit unions [that] did not cause the financial crisis and have traditionally acted in good faith.”  It further emphasized that this unintended inclusion of credit unions has created an environment whereby “credit unions can no longer afford to review and comply with hundreds of regulations totaling thousands of pages.”  With this in mind, the NAFCU pressed Secretary Mnuchin to utilize consultations with the heads of the agencies of the FSOC—as required by President Trump’s “Executive Order on Core Principles for Regulating the United States Financial System” prior to the issuance of a 120-day report—to work closely with the NCUA to “uncover practical approaches to remedying Dodd-Franks’ regulatory misalignment.”

The NAFCU’s letter also urged scrutiny of the CFPB’s detrimental rulemaking impact on credit unions in light of the fact that credit unions are already subject to “strict field membership and capital restrictions” and “numerous consumer protection provisions in the Federal Credit Union Act.”  In particular, it asked Secretary Mnuchin to address CFPB actions that are especially burdensome on credit unions, such as those related to: (i) unfair, deceptive or abusive acts or practices, (ii) debt collection, (iii) qualified mortgages, (iv) mortgage servicing; (v) consumer complaints, (vi) Home Mortgage Disclosure Act requirements, (vii) overdraft programs, (viii) payday lending rules, (ix) arbitration and (x) small entity exemptions.

Finally, citing the recent changes in party affiliation with respect to the new administration and the composition of agency heads serving on the FSOC, the NAFCU urged the FSOC to review CFPB rules “that it believes pose a safety and soundness risk to the banking system or the stability of the financial system.”  Particularly, the NAFCU entreated the FSOC to use its authority under section 1023 of Dodd-Frank to stay and set aside CFPB regulations to “spur renewed dialogue between the Bureau and the federal banking agencies regarding rules that may actually pose systemic risk to financial institutions and the customers they serve.”