Mick Mulvaney promised credit unions things would be different at the Consumer Financial Protection Bureau.
“We are there to help protect people who use credit cards, but we’re also there to help protect the people who provide that credit, because it is an important service to provide to consumers,” Mulvaney said Tuesday at the Credit Union National Association’s Governmental Affairs Conference.
But even with a CU-friendly director at the helm, will credit unions see regulatory relief? According to a panel of regulatory experts who spoke on Wednesday to GAC attendees, regulatory relief is far from certain.
“The tone at the top has changed,” said Ben Olson, partner at Buckley Sandler LLP. “The laws that were on the books for Dodd-Frank are still there. That means there’s still liability attached to it.”
CFPB examiners are still actively enforcing those laws. There’s been an uptick in examinations on technical issues, but credit union compliance professionals can expect fewer UDAAP concerns. “There’s not as much change as people might expect,” Olson said. “That doesn’t mean change isn’t coming, but it’s not here yet.”
The problem, he said, is many financial institutions don’t understand this reality.
“For any of us who advise financial institutions in the current environment, the discussion usually boils down to ‘Why do I need to worry? Trump won the election,’ ” Olson said. “But I think they’re in for some big surprises.”
Kathleen Ryan, partner at Akerman LLP, warned that there are still plaintiff lawyers that may take private right of action.
“So even if the CFPB throttles back and other regulators seem to be stepping back, there’s still the plaintiffs’ bar,” Ryan said. “Some state attorneys general can also be quite active in this space. There were 16 who signed onto a letter that seemed to be spearheaded by the New York AG criticizing director Mulvaney.”
Stefanie Jackman, partner at Ballard Spahr LLP, has also seen state AGs and licensing regulators be more aggressive since Mulvaney’s appointment.
“Even though the CFPB might be a bit more tempered right now in its approach, I think the ship has sailed with some of this – at least at the state level,” Jackman said. “We could be in a world where we now have about a 50-state matrix of compliance and litigation risks, as opposed to a more centralized system.”