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CUNA supports CFPA creation with caveats
WASHINGTON (7/15/09)--In a Tuesday letter sent to House Financial Services Committee Chairman Barney Frank (D-Mass.), the Credit Union National Association (CUNA) said that while it supports the creation of the proposed Consumer Financial Protection Agency (CFPA), “examination, supervision and enforcement” of the consumer protection rules should be left “to each credit union’s prudential regulator.” The CFPA should have “full authority to write the rules for consumer protection,” the letter added. The letter followed a Tuesday briefing for Democratic members of the House Financial Services Committee by CUNA and other industry groups. Consumer groups briefed the members following CUNA's session. The briefing was scheduled in advance of House hearings on the government's proposals to revamp the financial services regulatory structure. Additional House hearings on regulatory restructuring are scheduled for later in the week. In the letter and its remarks to House members, CUNA also expressed credit union concerns over proposed mandates that would require credit unions to “first offer a member a ‘standard’ financial product” before they can offer that member a product that may be better suited to his or her financial needs. CUNA also urged legislators to ensure that the regulatory streamlining and modernization promised by the CFPA proposal “becomes a reality” and to address the issue of federal preemption of state consumer laws so that there is one set of rules consumers can become knowledgeable about and financial institutions need to comply with. CUNA made clear its intent that it was not dismissing the proposed agency out of hand as most other groups have done, but that it wants to participate in the policy dialogue to protect credit unions' interests. CUNA also spoke in favor of enlarging the proposed CFPA governance board beyond the planned five members, saying that the board should include space for “industry representatives, a state or federal credit union regulator,” and, potentially, a state consumer agency representative. CUNA’s commentary was also sent to other House Financial Services Committee members as well as Senate Banking Committee Chairman Christopher Dodd (D-Conn.), Treasury Secretary Timothy Geithner, and Treasury Assistant Secretary Michael Barr. Barr in prepared testimony delivered before the Senate Banking Committee on Tuesday said that “a new agency with a focused mission, comprehensive jurisdiction, and broad authorities” would be the only way to ensure that both “consumers and providers” benefit from “high and consistent standards and a level playing field across the whole marketplace.” The CFPA will also “consolidate existing regulators and authorities” rather than simply creating a “new layer of regulation,” Barr added. One such consolidation would be a single federal mortgage disclosure, Barr said. Barr has recently indicated that all financial institutions would receive the same treatment under the CFPA, regardless of their composition or charter. Noting that credit unions played little to no role in the genesis of the current financial crisis, Dodd during the Senate committee hearing indicated that there could be a lack of “willingness” for treating all financial institutions in the same manner.


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