The presidential election is over, and I feel like I’ve run two consecutive marathons. Election fatigue syndrome should be recognized by the American Medical Association. Credit union trade newspapers get a little too overheated about current events. There was actually an article discussing how the Chicago Cubs winning the World Series would affect credit unions (Hint: There’s no effect.)
President-Elect Trump promised during the campaign to reduce regulatory policies and dismantle the Consumer Financial Protection Bureau (CFPB) which was created after the Great Recession. The CFPB’s initial objective was to regulate bad behavior at the largest banks (Update Alert: Somehow, Wells Fargo fell through the cracks six years after the fact.)
However, the small banks and credit unions that did not cause the recession got swept into the regulatory morass. This has created more policies, more cost, and most unfortunately, more bank customers and credit union members are angrier than ever. While the regulations have been a modest benefit to those who have lost money from unethical banks, it has also created confusion and frustration with consumers who want to bank their way.
I certainly sympathize with how our members feel. It’s frustrating for us to tell our members they can’t do something because federal regulations forbid it. The fact remains that CFPB was created only to regulate financial institutions with assets in excess of $10 billion. Unfortunately, CFPB whispers in our regulators’ ears; hence, all credit unions and banks are bound to follow virtually all of CFPB’s regulations.
CFPB’s corporate setup is odd. One man, Richard Cordray, runs the show and is appointed by the President without congressional approval. It was established this way to provide a separation between the new agency and the legislative branch of government. However, no one oversees their budget, which allegedly is created from civil money penalties charged to the bad actors. Other independent federal agencies, such as the NCUA which insures credit union deposits, have a board of directors overseeing agency management. The inclusion of a board would help give this agency some regulatory and financial oversight.
Discounting the media guessing at what may happen, nobody really knows for sure what will happen after January 20, 2017 when President-Elect Trump becomes President Trump. One thing is for sure: If the Cubs can win the World Series, anything is possible.