Rounds Joins 69 Colleagues in Letter to CFPB Requesting Changes to Banking Regulations
Urges Colleagues to Cosponsor his TAILOR Act
PIERRE—U.S. Senator Mike Rounds (R-S.D.) joined 69 of his fellow senators in a letter to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray, requesting the CFPB tailor its regulations to match the risk profile of credit unions and community banks when crafting regulations. Last week, Rounds introduced the TAILOR Act, which would require federal regulatory agencies, including the CFPB, to take similar steps to make sure the agencies consider the risk profile and business models of individual financial institutions and tailor those regulations accordingly.
“In both good economic times and bad, community banks and credit unions serve as pillars of their communities, providing the capital and access to credit that families and small businesses need to grow,” wrote the senators. “We agree that it is important for consumers to be empowered to take more control over their economic lives, and that bad actors should be rooted out of the financial marketplace. However, the CFPB must also consider its impact on community-based depository lenders, who are essential to spurring economic growth and prosperity at a local level, and not disrupt the good work of community lenders to help someone start a business, buy a home or car, or put their kids through college.”
Rounds also urged his colleagues to cosponsor the TAILOR Act: “Similarly, my TAILOR Act would codify into law the requirement that federal agencies, CFPB included, tailor their regulations by taking into consideration the risk profile and business models of individual financial institutions. I am pleased so many of my colleagues agree that federal regulators should tailor their regulations for smaller financial institutions so they can focus their resources on taking care of their customers, rather than spending time and money on regulatory compliance. I welcome them to cosponsor the TAILOR Act.”
The letter was led by Sens. Ben Sasse (R-Neb.) and Joe Donnelly (D-Ind.), and signed by Sens. Mike Rounds (R-S.D.), Lamar Alexander (R-Tenn.), Kelly Ayotte (R-N.H.), Tammy Baldwin (D-Wis.), John Barrasso (R-Wyo.), Michael Bennet (D-Colo.), Roy Blunt (R-Mo.), John Boozman (R-Ark.), Richard Burr (R-N.C.), Shelley Moore Capito (R-W.Va.), Bob Casey (D-Pa.), Bill Cassidy (R-La.), Dan Coats (R-Ind.), Thad Cochran (R-Miss.), Susan Collins (R-Maine), Bob Corker (R-Tenn.), John Cornyn (R-Texas), Tom Cotton (R-Ark.), Mike Crapo (R-Idaho), Ted Cruz (R-Texas), Steve Daines (R-Mont.), Mike Enzi (R-Wyo.), Joni Ernst (R-Iowa), Deb Fischer (R-Neb.), Jeff Flake (R-Ariz.), Cory Gardner (R-Colo.), Lindsay Graham (R-S.C.), Chuck Grassley (R-Iowa), Orrin Hatch (R-Utah), Martin Heinrich (D-N.M.), Heidi Heitkamp (D-N.D.), Dean Heller (R-Nev.), John Hoeven (R-N.D.), James Inhofe (R-Okla.), Johnny Isakson (R-Ga.), Ron Johnson (R-Wis.), Tim Kaine (D-Va.), Angus King (I-Maine), Mark Kirk (R-Ill.), Amy Klobuchar (D-Minn.), James Lankford (R-Okla.), Mike Lee (R-Utah), Joe Manchin (D-W.Va.), John McCain (R-Ariz.), Claire McCaskill (D-Mo.), Mitch McConnell (R-Ky.), Jerry Moran (R-Kan.), Lisa Murkowski (R-Alaska), Rand Paul (R-Ky.), David Perdue (R-Ga.), Gary Peters (D-Mich.), Rob Portman (R-Ohio), James Risch (R-Idaho), Pat Roberts (R-Kan.), Marco Rubio (R-Fla.), Tim Scott (R-S.C.), Richard Shelby (R-Ala.), Jeff Sessions (R-Ala.), Debbie Stabenow (D-Mich.), Dan Sullivan (R-Alaska), Jon Tester (D-Mont.), John Thune (R-S.D.), Thom Tillis (R-N.C.), Pat Toomey (R-Pa.), Tom Udall (D-N.M.), David Vitter (R-La.), Mark Warner (D-Va.) and Roger Wicker (R-Miss.).
Full text of the letter:
The Honorable Richard Cordray
Consumer Financial Protection Bureau (CFPB)
1700 G Street, NW
Washington, D.C. 20552
Dear Director Cordray,
In both good economic times and bad, community banks and credit unions serve as pillars of their communities, providing the capital and access to credit that families and small businesses need to grow. That is why Congress and federal regulators have long taken the approach that credit unions and community banks should be treated differently from the largest financial institutions and non-bank lenders. It is our hope that the CFPB also takes this approach and considers the impact of its rule-making on smaller financial institutions and consumers. We request that the CFPB carefully tailor its regulations to match the unique nature of community banks and credit unions.
As it has now been more than six years since the enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), there are many new rules and regulations in place. We must ensure that credit unions and community banks are not unduly burdened by compliance, but rather have the ability to maintain their close relationships and continue to offer a wide variety of consumer financial products and services.
We agree that it is important for consumers to be empowered to take more control over their economic lives, and that bad actors should be rooted out of the financial marketplace. However, the CFPB must also consider its impact on community-based depository lenders, who are essential to spurring economic growth and prosperity at a local level, and not disrupt the good work of community lenders to help someone start a business, buy a home or car, or put their kids through college. Since we all recognize these community lenders were not the primary cause of the financial crisis, the CFPB must carefully tailor its rulemaking.
Dodd-Frank explicitly granted the CFPB the authority to tailor regulations in Section 1022(b)(3)(A) by allowing the CFPB to “exempt any class” of entity from its regulatory requirements. We believe the CFPB has robust tailoring authority and ask that you act accordingly to prevent any unintended consequences that negatively impact community banks and credit unions or unnecessarily limit their ability to serve consumers.
Thank you for your consideration and we look forward to working with you on this important matter.