The CFPB already tailors its rules to take into account the size of a financial institution, agency Director Richard Cordray told 70 senators last week.
Responding to the senators’ call to provide regulatory relief to small credit unions and other financial institutions, Cordray restated agency policy and gave several examples of rules that he said were designed to take into account the regulatory burden small financial institutions face in complying with the agency’s rules.
“As I have expressed in the past, the bureau recognizes that community banks and credit unions did not cause the financial crisis,” he wrote. “For that reason, the bureau is committed to ensuring that the regulations that we promulgate are well-tailored and effective.”
For instance, he said, the agency designed rules governing Qualified Mortgages when it designed its rules. The bureau also amended definitions of “small creditor” and “rural area” to extend its transition period for certain rules.
The CFPB also relaxed requirements for appraisals, exempted small services from providing periodic statements under the in Lending Act, exempted small servicers from loss mitigation requirements, exempted lower-volume depositors institutions from Home Mortgage Disclosure Act reporting, and provided regulator certainty for small institutions under the Electronic Fund Transfer Act, according to Cordray.
Cordray also said that his agency established Small Business Review Panels to take into account the needs of small financial institutions.
The CFPB also provides regulatory guidance on its website to help small financial institutions understand the agency’s regulations, he added.
In addition to the 70 senators that sent their letter, some 329 members of the House have asked the agency to take into account the size of financial institutions when writing its rules.
And on Friday, credit unions asked the CFPB to provide them with an exemption to rules governing mandatory arbitration agreements.
