The National Credit Union Administration (NCUA) is requesting that the Consumer Financial Protection Bureau provide conditional exemption for credit unions with assets of more than $10 billion from its examination and enforcement authority.
In a letter to CFPB Director Richard Cordray, NCUA Chairman Mark McWatters said that shifting examination and enforcement authority to NCUA offers numerous benefits from the current system, in which credit unions face unnecessary examination burdens and aggressive punitive fines.
“Subjecting federally insured credit unions and their consumer/member owners to the dual examination—and, in the case of federally insured, state-chartered credit unions, triple examination—regime mandated under Section 1025 of the Consumer Financial Protection Act imposes unnecessarily burdensome costs, particularly given their positive, consumer-focused role,” McWatters wrote.
McWatters said the CFPB and the NCUA should work together on enforcement.
“As the prudential regulator of federally insured credit unions, the NCUA possesses a broader arsenal of enforcement tools than is available to the CFPB, allowing the agency to take more targeted actions to protect consumers and address consumer financial protection law violations,” McWatters wrote.
Six federally insured credit unions—Navy Federal Credit Union, State Employees’ Credit Union, Pentagon Federal Credit Union, Boeing Employees Credit Union, SchoolsFirst Federal Credit Union, and The Golden 1 Credit Union—have assets of $10 billion or more.
McWatters said shifting this authority would free up CFPB’s examination and enforcement resources to focus on larger investor-owned, for-profit institutions while continuing to provide consumer protections for credit union members.
Further, the change would not affect CFPB’s exclusive rulemaking authority over federally insured credit unions, and the bureau would still be able to take enforcement action if it determined NCUA was not adequately enforcing consumer protection laws.
“I believe granting federally insured credit unions an exemption from Section 1025 will help ensure they are treated fairly and equitably while also maintaining consumer protections and a level playing field for all parties involved,” McWatters wrote.