WASHINGTON — Credit union executives talked up a pending regulatory relief effort while endorsing a radical shift in direction by the Consumer Financial Protection Bureau during a meeting with President Trump and other top White House officials on Monday.
Credit union representatives told the president they support recent actions by Office of Management and Budget Director Mick Mulvaney, who is also serving as acting director of the CFPB and has dramatically scaled back the CFPB's rule-writing and enforcement activities.
The change in leadership at CFPB was described as a "breath of fresh air, because they are actually asking us for our input with respect to some of the things that are going on at credit unions," said Lisa Ginter, president and CEO of $2.2 billion-asset Community America Credit Union in Lenexa, Kan.
Ginter was one of six representatives of the Credit Union National Association, where she serves on its board, who met with the president, National Economic Council Director Gary Cohn and Chief of Staff John Kelly, along with six representatives of the National Association of Federally-Insured Credit Unions.
“The president has a great understanding of credit unions and the value of them to their communities and the impact of regulatory burdens on credit unions and the fact that his work with the CFPB and other places in the administration has been helpful, so he is trying to do more,” said Dan Berger, chief executive of NAFCU, who was also at the meeting.
Specifically, at least one credit union exec raised concerns about the CFPB's "qualified mortgage" rule, which outlined suggested underwriting requirements for mortgage originations. Many financial institutions criticize the rule for restricting access to mortgage credit.
“I had an opportunity to share some of the concerns that we have had at, not only our credit union, but in the industry and particularly locally for us, the 'QM' rules and the effect it has had on a number of smaller credit unions ability to get loans out,” said Dallas Bergl, president and CEO of $340 million-asset Inova Federal Credit Union in Elkhart, Ind.
He added that “we were able to convey to them that we were supportive of the recent change at the CFPB leadership and that we were pleased with the improvements we have seen at NCUA, our prudential regulator, as well."
Credit unions executives also expressed support for National Credit Union Administration Chairman J. Mark McWatters, who is on the short list to be nominated as permanent director of the CFPB. Executives at the meeting didn't say whether Trump weighed in on that potential nomination.
One area that didn't come up was credit unions' federal tax exemption. While Senate Finance Committee Chairman Orrin Hatch, R-Utah, has opened that subject up for discussion, credit union executives instead said they focused on regulatory burden.
While Trump and White House staff didn’t endorse a pending regulatory relief bill in the Senate that is expected to come up for a vote in the coming weeks, administration officials generally endorsed the direction of the bill, attendees said.
“There was no decision, no announcement of a statement of administration position or anything like that, but I think it was certainly the tenor of the meeting was to discuss regulatory burden and the need to move legislation for small financial institutions like credit unions,” said Jim Nussle, the head of CUNA, who attended the meeting.
Maurice Smith, president and CEO of the $1.9 billion-asset Local Government Employees Credit Union in Raleigh, N.C., said they expressed to Trump that “one size regulation that fit all institutions doesn’t work … regulation should be tailored to the particular institution and the industry and should be productive.”