NAFCU: We've Always Opposed CFPB Rulemaking

First and foremost, let’s be clear: NAFCU listened to its members in 2009, and we listen to them now. We fight every day to make our members and the credit union movement stronger. As noted correctly in Ms. Anderson’s column, NAFCU has always been steadfast in strongly opposing the CFPB’s rulemaking authority over credit unions. At every possible opportunity, in hearings and in myriad letters to Congress, NAFCU has been unequivocal in its conviction.
Throughout the legislative negotiations in 2009, NAFCU strongly challenged the CFPB’s authority over credit unions. Specifically, it was at the hearing before the House Committee on Small Business on Sep. 23, 2009, where Price Choppers Employees Federal Credit Union President and CEO Dawn Donovan, testifying on behalf of NAFCU, clearly stated our position. Notably, this was the only official hearing where credit union trade groups testified before Congress on financial reform, including the creation of the CFPB (earlier proposed as the CFPA). As Donovan pointed out:
“NAFCU does not believe such an agency should be given authority over regulated federally insured depository institutions, and opposes extending this authority to credit unions.
“As the only not-for-profit institutions that would be subject to the CFPA, credit unions would stand to get lost in the enormity of the proposed agency. Giving the CFPA the authority to regulate, examine and supervise credit unions, already regulated by the NCUA, would add an additional regulatory burden and cost to credit unions.”
Over time in subsequent testimony, we have been unwavering about the CFPB and the dangers of overregulation on credit unions.
As SRP Federal Credit Union President and CEO Ed Templeton, who is also NAFCU’s board chair, testified just this year:
“As expected, the breadth and pace of CFPB rulemaking is troublesome, and the unprecedented new compliance burden placed on credit unions has been immense.
“The impact of this growing compliance burden is evident as the number of credit unions continues to decline, dropping by 22% (more than 1,700) in institutions since 2007. A main reason for the decline is the increasing cost and complexity of complying with the ever-increasing onslaught of regulations. Since the second quarter of 2010, we have lost 1,100 federally insured credit unions, 96% of which were smaller institutions below $100 million in assets. Many smaller institutions simply cannot keep up with the new regulatory tide and have had to merge out of business or be taken over. Credit unions need regulatory relief, both from Congress and their regulators.”
Our position was not a politically popular one, nor was it an easy one to take. NAFCU’s board of directors and our lobbying team stood strong under unbelievable political pressure throughout the Dodd-Frank Act negotiations. But then again, NAFCU has never shied away from difficult positions. Over the years, NAFCU has always taken positions that are in the best interests of NAFCU members and the credit union industry. And that will never change.
Ms. Anderson is also correct in noting that the CFPB represents a significant hazard for credit unions – especially when you consider that not all the Dodd-Frank rules have been implemented yet. According to the Davis Polk report, in the first quarter of 2015, 235 (60.3%) of the 390 total required rulemakings have been finalized, while 84 (21.5%) rulemaking requirements have not yet been proposed. With still so many rules outstanding, it is a rather ominous outlook for credit unions and all the more reason for us to stand fast by our position.
NAFCU continues to believe credit unions should be exempt from CFPB rulemaking, and we will continue to advance that with full vigor at every juncture possible because it is the right thing to do. For us, there is little comfort in being right and seeing our worst predictions regarding the burden of overregulation come to fruition while our industry erodes.
B. Dan Berger is president/CEO of NAFCU. He can be reached at 703-522-4770 or dberger@nafcu.org.

Comments

Effective January 1, 2026 - Credit Union Succession Planning

First Responder Credit Union Academy www. NCOFCU .org Effective January 1, 2026 This statement from current NCUA Chairman Todd M. Harper states that “this final rule on succession planning establishes a way for the NCUA to address one of the most common causes for unplanned and unforced credit union mergers. It also ensures that smaller institutions remain the cornerstone of ...

Read Complete Article HERE>»

Federal Reserve Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3‑3/4 percent

Federal Reserve issues FOMC statement For release at 2:00 p.m. EST Share Available indicators suggest that economic activity has been expanding at a moderate pace. Job gains have slowed this year, and the unemployment rate has edged up through September. More recent indicators are consistent with these developments. Inflation has moved up since earlier in the year and remains somewhat elevated. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. Uncertainty about the economic outlook remains elevated. The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment rose in recent months. In support of its goals and in light of the shift in the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/4 percentage point to 3-1/2 to 3‑3/4 percent. In considering the extent and timing of additional adjustments to the target range for...

Read Complete Article HERE>»

Sunday Reading - Lake Manly Returns

Lake Manly Returns An ancient lake has reemerged in California's Death Valley National Park following record rainfall this year. Between 128,000 and 186,000 years ago, meltwater from ice covering the Sierra Nevada fed rivers that emptied into Badwater Basin, North America’s lowest point at 282 feet below sea level. The steady flow sustained Lake Manly, nearly 100 miles long and roughly 600 feet deep. The lake disappeared as Death Valley evolved into the driest place in North America , with some areas receiving under two inches of rain annually. This year, however, the park received 2.41 inches between September and November, marking its wettest autumn on record and triggering the temporary return of a shorter, shallower Lake Manly. Above-average rainfall periodically brings Lake Manly back, including in 2023 when Hurricane Hilary dumped 2.2 inches of rain on a single August day, allowing visi...

Read Complete Article HERE>»

Credit Union Profits Climb 21% As Margins Widen, NCUA Reports

If you don't read anything else, read this: Performance By Asset Category WASHINGTON—Federally insured credit unions posted a sharp rebound in profitability through the third quarter of 2025, with net income up 21% year over year to an annualized $19.1 billion, according to new NCUA data. The increase—one of the strongest gains across the agency’s quarterly metrics—came as institutions benefited from rising interest income, wider net interest margins, and relatively stable credit costs. The NCUA reported that Q3 data show interest income climbed 7.6% over the period while the systemwide net interest margin expanded nearly 13%, helping credit unions absorb higher operating expenses and modest increases in loan-loss provisioning. The earnings surge outpaced the credit union system’s 3.7% asset growth and came amid a mixed lending environment in which residential mortgage balances rose sharply, but auto lending weakened. The industry’s aggregate net worth ratio also im...

Read Complete Article HERE>»

NCUA promises flexibility in examinations and the flexibility to prudently adjust or alter member loan terms

In an effort to help members through the coronavirus crisis, the NCUA will give credit unions the flexibility to prudently adjust or alter member loan terms and will not subject those decisions to “examiner criticism,” agency Chairman Rodney Hood said Monday. Hood, in a letter to credit unions , outlined the steps the agency is taking to address the health emergency. Those steps include requiring all agency staff to work offsite through March 30. All examination work will be conducted offsite as well, the agency said. “A credit union’s efforts to work with members in communities under stress may contribute to the strength and recovery of these communities,” Hood wrote in outlining steps that credit unions may take to help members. Those steps include: Waiving ATM fees and increasing ATM daily cash withdrawal limits. Waiving overdraft fees. Waiving early withdrawal penalties in time deposits. Easing restrictions on cashing out-of-state and non-members checks. Easing credit terms f...

Read Complete Article HERE>»

NCUA"s new video module provides best practices for merging

The three-part video module provided by NCUA, available online here , examines current trends in mergers, when a credit union board should consider a merger and how to negotiate a merger agreement that best serves the credit union’s interests. Every credit union should discuss the possibilities of a future merger in their strategic planning.

Read Complete Article HERE>»

Is it a ‘skip’ or a ‘pause’? Federal Reserve won’t likely raise rates next week but maybe next month

WASHINGTON — Don’t call it a “pause.” When the Federal Reserve meets next week, it is widely expected to leave interest rates alone — after 10 straight meetings in which it has jacked up its key rate to fight inflation. But what might otherwise be seen as a “pause” will likely be characterized instead as a “skip.” The difference? A “pause” might suggest that the Fed may not raise its benchmark rate again. A “skip” implies that it probably will — just not now. The purpose of suspending its rate hikes is to give the Fed’s policymakers time to look around and assess how much higher borrowing rates are slowing inflation. Calling next week’s decision a “skip” is also a way for Chair Jerome Powell to forge a consensus among an increasingly fractious committee of Fed policymakers. One group of Fed officials would like to pause their hikes and decide, over time, whether to increase rates any further. But a second group worries that inflation is still too high and would prefer tha...

Read Complete Article HERE>»

Fed to Keep Rates Higher Even Longer; CU Economists Still See Chance for Cuts Soon

CU trade economists think another good inflation report or two might convince the Fed to lower rates twice this year. By Jim DuPlessis | June 12, 2024 at 04:11 PM Fed Chair Jerome Powell speaks at a news conference in Washington, D.C., Wednesday afternoon. The Fed kicked the can down the road Wednesday, keeping rates at their current high level and signaling that it will take more time in reducing them. The Federal Open Market Committee (FOMC) ended its two-day meeting Wednesday with a decision to maintain the federal funds rate at 5.25% to 5.50%. Its projection report showed half of FOMC members expect the rate to fall to 5.1% by year's end, indicating one 25-basis-point rate cut this year. In March, the median expectation was for two rate cuts. Fed Chair Jerome Powell said half of members expect rates will fall to 3.1% by end of 2026. The FOMC's four remaining meetings this year are July 30-31, Sept. 17-18, N...

Read Complete Article HERE>»

7 Things to Do (And Avoid) with SMS/Text in Credit Union Marketing

By not using SMS text messaging for marketing, you are missing a channel with a 98% open rate and a rapid response rate. Consumers love the convenience and are open to receiving personalized and relevant texts from their bank and credit union. Naturally there are some caveats to be aware of. Here are seven pointers. Are you content to have your customers take 90 minutes to respond back to a communication you’ve sent, or would 90 seconds be better? That’s the difference in average response times between email and SMS text. Then there is the open rate: SMS texts have high open rates — up to 98%, according to Gartner and 82% by another source. The average open rate of email is around 20%. If you send an email with a link to a survey to find out what a consumer thinks about the virtual meeting with a lending officer they just had, it may linger in the consumers’ inbox for days, at which point the experience is no longer top-of-mind or the consumer decides to simply delete the ...

Read Complete Article HERE>»

The federal government is making it impossible to be small

Bank Lawyer's Blog July 24, 2016 Credit Unions and Community Banks Both Face "Shrinkage" In his recent email newsletter (email marvin.umholtz@comcast.net for a subscription), credit union consultant Marvin Umholtz discusses the fact that credit unions face the same problem of "shrinkage" that we have discussed on this blog for some time with respect to the community banking industry . Not surprisingly, both segments of the financial services industry suffer from the same disease: crushing regulation. On July 8th the Editor In Chief for the Credit Union Journal, Lisa Freeman, launched an initiative exploring reader attitudes about the serious question of whether 74% of the credit union industry is "too small to survive" www.cujournal.com/news/opinions/forget-about-too-big-to-fail-for-cusits-too-small-to-survive-1026267-i.html. The massive regulatory burden, much of it sourced by the federal government, had been identified as the primar...

Read Complete Article HERE>»

First-responder Credit Union Newsroom

Search This Blog