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Know Before You Owe, Credit Unions, and Community Banks

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As you have been reading here on the blog, we released the first draft versions of a combined Good Faith Estimate and Truth in Lending disclosure form in May. Here on the website, we asked for public feedback through the Know Before You Owe project. We’ve also been talking to some of the institutions that will have to use these forms with their customers.

Shortly after Know Before You Owe launched, I was a guest at the New Hampshire and Vermont Bankers Associations’ annual compliance conference. I was struck by participants’ enthusiastic response to the project. Many attendees mentioned that they were impressed not only by the lower burden imposed by the draft forms, but also by the CFPB’s eagerness to solicit feedback at an early stage of the process.

We also spoke with community bankers from Connecticut, Rhode Island, and Massachusetts when they stopped by the CFPB office. Steve Antonakes, the CFPB’s Assistant Director for Large Bank Supervision, and I answered a variety of questions and gathered input from individual bankers about each of their views. One banker suggested that we conduct outreach to the software providers who help create mortgage disclosure forms. This will help bring the technological concerns around building these forms into the process.

Later that afternoon, we discussed the Know Before You Owe forms with individuals from 20 credit unions who each shared their own opinions. This ad hoc meeting lead to valuable, specific insights on what mortgage information works best for consumers.

We are committed to remaining attentive to the concerns of credit unions and community banks throughout the development of CFPB priorities, and we look forward to continuing this dialogue for future CFPB initiatives.

A mortgage loan market that works for all Americans benefits from input from many places. We wanted to make sure individuals from credit unions and community banks were heard from alongside the consumers they serve and other stakeholders.

The CFPB plans to issue a regulatory proposal on mortgage disclosure for public comment in the future.

Continuing our work with Community Banks and Credit Unions

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Since Professor Warren spoke at the Independent Community Bankers of America convention last month, she and I have continued to meet with community banks and credit unions. We were thrilled to reach the milestone of connecting with small providers in all fifty states, but we know there is still more for us to do. As we said at the time, we are continuing to reach out to independent bankers and credit unions from across the country to better understand their concerns.

The week before last, Professor Warren connected with thirty-eight members of the North Carolina Bankers Association in Charlotte. In Columbus, Ohio, I spoke about the new consumer bureau and our goal to ensure a level playing field for small depository institutions with several hundred members of the Ohio Credit Union Association at their annual convention. And over the last two weeks, we have been in touch with community bankers from California, Arkansas, Kentucky, New York, and Alabama. We have reached out to the State Department Federal Credit Union, and we spoke to the community bank group at the American Bankers Association.

Finally, last week Professor Warren traveled to Lexington, Kentucky, where she delivered the Chellgren Lecture at the University of Kentucky Law School. While there, she also participated in a seminar in Louisville called A Day with the Commissioner. The event was hosted by the Kentucky Department of Financial Institutions and the Federal Reserve Banks of St. Louis and Cleveland. Many attendees of the seminar came from nearby banks, and Professor Warren stressed that consolidating the functions of several agencies into one will simplify the banks’ regulatory burden.

At the Podium with America’s Credit Unions

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Last Tuesday morning, Professor Warren spoke to the Credit Union National Association (CUNA) at its Annual Governmental Affairs Conference. CUNA is a trade association representing 90 percent of America’s credit unions.

Professor Warren spoke to them about the CFPB’s emphasis on clarity. She suggested that in a market in which prices and risks are clear up front, the investments made by credit unions in “creating a valued partnership with your members can be a real competitive advantage.” Take a look:

Read the full text of her prepared remarks.

Also last week, thirty-five members of the Delaware Bankers Association visited Washington to meet with several federal agencies and Congressional staffers. On Friday, Professor Warren sat down with the group to share ideas. Three quarters of the attendees were presidents or CEOs of smaller banks with assets of less than $10 billion.

Professor Warren reviewed three of our top priorities, all of which should help community banks and other providers who want to offer beneficial products to their customers in a transparent manner: consolidated and streamlined mortgage shopping disclosures, simplified credit card agreements, and supervision of non-bank entities that have not previously been subject to Federal oversight. We strongly encouraged their use of our website to share their expertise and input as we stand up this consumer bureau.

Elizabeth Vale is the Assistant Director of External Affairs for Small Business and Community Banks.

Professor Warren speaks with America’s credit unions

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Yesterday, Professor Warren delivered an address to the Credit Union National Association, a trade association representing credit unions throughout the United States.

Here is a portion of her remarks:

So that brings me to the heart of what I want to say to you about the Consumer Financial Protection Bureau. Our mission is to make the price clear up front, to make the risks clear up front, and to make it easy for customers to be able to compare three or four products straight up. That’s our central mission. Clarity is the norm here. Your work – creating a valued partnership with your members can be a real competitive advantage – not a way for others to take your business. So I see the Consumer Agency as an ally of credit unions.