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Michigan Credit Union League

CFPB Director Cordray Announces Resignation

The Consumer Financial Protection Bureau (CFPB) has announced that Director Robert Cordray will be stepping down from his post at the end of November. Cordray was the first to serve as director of the CFPB, which was organized in 2013 in reaction to the 2008 financial crisis.

Recent statements from Cordray regarding progressive rule changes, such as the temporary changes to the HELOC reporting threshold, show he was willing to listen to the credit union community. But historically, the CFPB has been a cause of tension for credit unions.

The consensus from credit unions, credit union associations and industry advocates was that the bureau ruled with an inappropriate approach to regulation, sweeping in not-for-profit credit unions with for-profit banks.

The CFPB’s original directive was to protect consumers from predatory financial institutions. However, credit unions have a long history of providing products and services that are already tailored to consumers’ best interests. Regardless, the CFPB’s method to regulation has not distinguished credit unions from other financial institutions that prey on consumers’ vulnerabilities.

In an interview MCUL conducted with Sen. Gary Peters in 2016, Peters stated that it had “become clear that a one-size-fits-all approach doesn’t work for credit unions and other community institutions, and they should be treated differently than the largest firms.”

“This resignation was widely anticipated and wasn’t that surprising. Mr. Cordray will hopefully be remembered as a well-intentioned advocate for consumer protection. He often went to great lengths to understand the credit union difference in tailoring regulations,” said MCUL CEO Dave Adams.

“He did the job that he was hired to do. The problem was not with the director but the bureau itself and the unchecked breadth of its authority. Hopefully a new director and/or statutory changes can exempt credit unions and smaller banks from the regulations promulgated by the bureau,” continued Adams.

CUNA President/CEO Jim Nussle shared a similar sentiment, saying that CUNA is looking forward to a new era “that takes credit unions’ structure and purpose into account during rulemakings.”

“Moving forward, CUNA urges the CFPB’s new leadership to address the problems that pending and final rules have caused credit unions and their 110 million members, and move towards a new approach that recognizes the exceptional consumer protections credit unions provide, while continuing to address abusers of consumers," added Nussle.

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2017-11-20 00:00:00