e-Weekly

February 9, 2011

Warren indicates that CFPB will work for reduced regulatory burden
The Consumer Financial Protection Bureau (CFPB), once it is fully organized later this year, will work to reduce some regulatory burdens faced by credit unions and other financial institutions and will review the impact of its own rules on credit unions and other small financial service providers, CFPB architect Elizabeth Warren said in a recent letter to Representative Randy Neugebauer (R-Texas).

Warren's letter was prompted by a January 18 request from Neugebauer for more information on the development and future operations of the CFPB. Neugebauer, who serves on the House Financial Services Committee's Subcommittee on Financial Institutions and Consumer Credit, also discussed the CFPB during an early January meeting with Warren.

In Warren's letter, she said she shares Neugebauer's "concern for promoting consistent regulation and minimizing implementation burdens," and added that the CFPBs dialogue with the National Credit Union Administration (NCUA) and other financial regulators is "imperative" as the CFPB transitions into its own regulatory activities.

The CFPB will take over a number of regulatory roles from the Federal Reserve and other agencies on July 21. The NCUA will remain mostly independent, however, as credit unions holding under $10 billion in assets will not be examined by the pending CFPB. The NCUA will have a seat on a pending regulatory council.

CFPB representatives have discussed the agency's goals and future work with credit unions, leaders of other financial institutions, and individual consumers as it works toward the July 21 deadline. The Credit Union National Association (CUNA) has met with the CFPB as well, stressing the need to minimize credit unions' regulatory burdens, costs, and requirements.

CUNA has delivered commentary on how consumer financial regulations can be improved and how consumer financial disclosures can be pared down, and has noted that improving the transparency and consumer-friendliness of many financial products would benefit credit unions, holding competitors to the same high standards generally used by credit unions in these core areas.

Warren also outlined the CFPB's structure in the letter. The CFPB will have six divisions, with respective groups addressing consumer engagement and education, supervision and enforcement, research markets and regulations, legal matters and general counsel, external affairs, and the organization's own internal operations.

Treasury offers webinar on electronic benefit payments
The U.S. Treasury's Go Direct program announced that a pair of webinars will be held this month to better educate financial institutions and other Go Direct campaign partners on a recent rule change that will require all federal benefit payments to be paid electronically.

The webinars will take place on February 16 and 17.

The Treasury, last year, announced that all federal benefits that are filed on or after March 1, 2011, will be paid electronically via either direct deposit or the Direct Express Debit MasterCard card. Individuals that are currently receiving their benefit payments via paper check will be asked to accept their benefits electronically by March of 2013.

The change will save over $125 million annually, according to the Treasury.

The Treasury has also again selected February as Go Direct month in a bid to encourage consumers to take advantage of the safety benefits of direct deposit for Social Security payments and other federal benefits. February has been Go Direct month since 2006.

For more on the coming Go Direct webinars, use this link: Go Direct Webinars.

Consumer credit rises 3% overall in December but holds steady at credit unions
Total U.S. consumer credit increased at an annual rate of 2.5% in fourth quarter 2010, according to the most recent Federal Reserve statistical release on consumer credit. Consumer credit at credit unions held steady.

Total revolving credit decreased at an annualized rate of 2.75%, and total non-revolving credit rose at an annual rate of 5.5%.

In December, total consumer credit went up at a 3% annual rate over November's rate.

The total amount consumers borrowed in December was $2.410 trillion, an increase over the $2.404 trillion in November. Revolving credit was $800.5 billion, compared with $798.2 billion in November. Nonrevolving credit totaled $1.609 trillion, compared with $1.606 trillion in November.

At credit unions, members borrowed in December $227.5 billion, the same as in November, but down from $237.2 billion a year ago. Revolving credit at credit unions increased to $36.3 billion from $35.8 billion in November and was up from $35.4 billion a year ago. Non-revolving credit at credit unions decreased to $191.1 billion from $191.8 billion in November and down from $201.7 billion a year ago, said the Fed's report.

Click here to read the Federal Reserve statistical release on consumer credit.