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CU Times: Credit Union Capitol Hill Efforts Slow
Monday, September 26, 2016 6:45 AM

Credit unions had better be ready next year to storm Capitol Hill in support of legislation that would exempt their institutions from many CFPB rules, lawmakers say. Credit unions appear to be in a particularly good position to make that case in light of the scandal at Wells Fargo, where employees opened some two million accounts in order to meet quotas.

“You have an unbreakable trust,” Sen. Joe Donnelly (D-Ind.) told attendees at a recent gathering of credit unions in Washington.

Donnelly is a member of the Senate Banking Committee, which held hearings on the Wells Fargo debacle. Some Democrats used the opportunity to stress the need for an agency such as the CFPB that investigates financial abuses on behalf of consumers.

“The Dodd-Frank Wall Street Reform and Consumer Protection Act provides the CFPB with the authority to take action against institutions engaged in practices that violate consumer financial laws, including those practices that are unfair, deceptive or abusive,” Senate Banking Committee ranking Democrat Sherrod Brown (D-Ohio) said in a letter to Banking Committee Chairman Richard Shelby (R-Ala.). “[The] announcement is yet another indication that the CFPB is making consumer financial markets safer for consumers and protecting hard-working American families from abusive financial practices.”

The CFPB has fined Wells Fargo $100 million for the widespread use of phony accounts. Some Republicans have criticized the agency, contending that it took too long to uncover the Wells Fargo scandal.

The agency is likely to be riding high as a result of the Wells Fargo probe, which has gained nationwide attention, Sen. Ben Sasse (R-Neb.) said. “That means that efforts to abolish the agency—as some conservatives and credit unions would like—are doomed to failure,” according to Sasse. “The CFPB is not going to be reined in anytime soon,” he said, although he denounced the CFPB as government on autopilot.

Democrats pledged to work with Republicans to try to provide credit unions with some regulatory relief from the CFPB. For instance, Rep. Maxine Waters (D-Calif.), the ranking Democrat on the House Financial Services Committee, said that if legislation is needed to provide that relief, she will sponsor it.

Those efforts cannot be part of a large-scale repeal of Dodd-Frank, one Democrat warned. “Dodd-Frank is not perfect, but we don't need to throw the baby out with the bath water,” said Rep. Joyce Beatty (D-Ohio).

Rep. Denny Heck (D-Wash.) also called for a bipartisan effort on behalf of credit unions. “There are some things we can do without abandoning the things we believe in,” he said. “We kept reaching high and as a [result] we got nothing.”

For more on this story, please visit Credit Union Times.