CUNA Meets with CFPB on CU Priorities
Other key issues that were discussed during the meeting with CFPB Assistant Director for Regulations Leonard Chanin and other agency staff at CFPB's headquarters in Washington included the need for credit unions to have flexibility in offering overdraft protection plans. CUNA also recommended the agency consider addressing issues relating to redundant outside ATM notices that have spawned recent lawsuits against credit unions and other institutions.
Multi-featured open-end lending programs, remittance transfer regulations, Regulation Z, the CFPB's pending mortgage disclosure revisions, and mortgage servicing issues were also discussed during the meeting.
In the meeting, CUNA stressed that the Dodd-Frank Wall Street Reform Act gives the CFPB the authority to exempt any class of institution it regulates from any of its rules. Credit unions, as a whole, have a strong track record of working with their members and helping them make informed financial decisions, CUNA said, adding that the CFPB should use its exemption power to help ease the burden faced by these credit unions.
The CFPB should also use its regulatory authority to eliminate redundant ATM disclosures, which are of questionable utility to consumers and are subjecting credit unions to needless costs and potential lawsuits, CUNA said during the meeting. The agency could revise its Regulation E requirements to no longer mandate duplicate ATM notices, CUNA added. In the alternative, CUNA staff discussed moving the outside notices to the ATM welcome screen.
Under current ATM notice requirements, credit unions and other financial institutions must display at each ATM location that fees will or may be charged. More detailed ATM fee information must also be provided before the transaction is completed, either by showing it on the ATM's screen or providing the ATM user with a small printed disclosure before the consumer is committed to paying the fee.
ATM placards posted on the outside of the machine are being intentionally removed or destroyed, and pictures of the damaged ATMs are then being used as evidence in non-compliance lawsuits against credit unions and other institutions. These lawsuits number in the hundreds, and some institutions are settling with plaintiffs to avoid legal costs, CUNA has noted.
A legislative fix to address this ATM issue has also been introduced, and that legislation is scheduled to be marked up during a Wednesday House Financial Services Committee hearing. The bill, H.R. 4367, had 120 cosponsors as of Monday.
CUNA Deputy General Counsel Mary Dunn, Senior Assistant General Counsel Jared Ihrig, Assistant General Counsel Luke Martone and Regulatory Counsel Dennis Tsang represented CUNA at the meeting.