Seventy senators signed a letter urging the Consumer Financial Protection Bureau to exempt credit unions and community banks from certain regulations.
The overwhelming show of support for a small institution carveouts comes after three-fourths of House lawmakers in March also called for exemptions from CFPB rulemakings.
The Senate letter, sent late Monday to CFPB Director Richard Cordray, urges the agency to grant relief from certain rulemakings through its exemption authority under the Dodd-Frank Act.
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In what has become almost a grim ritual, Consumer Financial Protection Bureau director Richard Cordray faced a barrage of hostile questioning from Republican members of the House Financial Services Committee, who hammered him over everything from payday lending to regulatory relief for small banks.
March 16 -
Three-fourths of House lawmakers signed a bipartisan letter that calls on the Consumer Financial Protection Bureau to take more steps to carve out community banks and credit unions from onerous regulations. But will it make a difference?
March 15
"We request that the CFPB carefully tailor its regulations to match the unique nature of community banks and credit unions," said the letter, which was drafted by Sen. Joe Donnelly, D-Ind., and Sen. Ben Sasse, R-Neb., and signed by 68 others.
The one-page letter does not specify which rulemakings are at issue, though mortgage underwriting and remittances have been identified in the past as areas that were intended primarily for large banks.
Since the passage of the Dodd-Frank Act in 2010, credit unions and community banks have repeatedly asked for exemptions from the CFPB's rules.
A key argument has been that small institutions did not cause the financial crisis and therefore should not be burdened with increased compliance costs.
Congress gave the CFPB authority under Dodd-Frank to grant exemptions on a rule-by-rule basis.
But Cordray has pushed back, arguing most recently in March that credit unions were at the table seeking broad exemption from oversight when Dodd-Frank was being debated.
"I feel Congress has spoken on that," Cordray said in response to harsh questioning from House Republicans during his semiannual report to Congress.
