Last week, Dan Coats, United States Senator for Indiana, introduced legislation that would lighten the burden on community banks and credit unions. The Community Financial Protection Act would modify the way in which the Consumer Financial Protection Bureau (“CFPB”) requests information about financial institutions with less than $10 billion in assets.
Most significantly, the bill focuses on requiring the CFPB to utilize the abundant publicly available information before issuing an information request from the prudential regulators. If the CFPB does request information not currently publicly available, it must advise the regulator of the justification for why the CFPB needs that information. Thereafter, the prudential regulator can deny any request for information from the CFPB. Finally, Coats’s bill limits the CFPB’s information requests to specific institutions; not industry-wide data.
The text of the bill is available here. Although the legislation is likely to change and may never be passed, the introduction of reforms that attempt to lighten the regulatory load of community banks and credit unions is always welcome.
Please contact Spilman or other knowledgeable counsel with questions.