At a time when many credit unions have the CFPB in their crosshairs, one credit union—the Self-Help Credit Union—is coming to the beleaguered agency’s defense.
The credit union has joined its affiliate, the Center for Responsible Lending, and several consumer groups in an attempt to intervene in a federal suit filed by PHH, a mortgage lender.
While Self-Help is supporting the current structure of the CFPB, major credit union-related trade groups, including CUNA and NAFCU, have called on Congress and the president to cut the agency’s powers.
In the suit, a panel of the U.S. Circuit Court of Appeals for the District of Columbia ruled that the structure of the CFPB is unconstitutional because it is governed by a single director – currently Richard Cordray – who can only be removed for cause. The panel said that the president should be able to fire the director for any reason, but stayed that order.
The CFPB and the Obama Administration asked that the full appellate court consider the case.
The motion to intervene identifies Self-Help as being chartered by the state of North Carolina Credit Union Division. It has $650 million in assets and 60,000 members, according to the court documents.
Last year, President Obama nominated John Herrera, Self-Help’s SVP for Latino and Hispanic Affairs for a seat on the NCUA board. Self-Help often has supported CFPB actions.
“SHCU and its members are directly impacted by regulations and enforcement that produce a fair, transparent and competitive consumer financial marketplace, and it supports such measures,” the motion states. “This is furthered by having a CFPB Director that is removable only for cause. Without this independence, too often regulations and enforcement are weakened by special interests, and harmful practices proliferate.”
The motion goes on to say that the Trump Administration opposes Dodd-Frank, which created the CFPB. It states that the administration could decide to abandon its defense of the agency in the lawsuit and so others should be permitted to intervene on the agency’s behalf.
In addition to the credit union and the Center for Responsible Lending, the groups that filed the motion are Americans for Financial Reform, the Leadership Conference on Civil and Human Rights and the United States Public Interest Research Group.
One individual, Maeve Brown, the chairman of the CFPB’s Consumer Advisory Board, joined the groups in the motion.
