Credit unions may not be paying attention to consumer financial protection “as closely as warranted,” National Credit Union Administration Chairman Todd Harper said yesterday. Speaking at an industry event, Harper called for a dedicated NCUA program to supervise consumer financial protection compliance.
“The NCUA must create a dedicated program to supervise for compliance with consumer financial protection and fair lending laws. In doing so, we will better protect consumers’ interests, ensure that the credit union system lives up to its commitment to serve members, and provide a comparable level of consumer protection oversight as federal bank regulators,” said Harper.
In quality control reviews of examination reports, the NCUA observed weaknesses in credit unions’ compliance management systems, Harper said, adding that “if left unchecked, issues such as deficient recordkeeping, or inadequate training, or weak internal review or audit processes could lead to heightened risks.”
NCUA observed shortfalls in compliance with the Fair Credit Reporting Act, potentially affecting the credit scores of consumers, Harper said, as well as Electronic Fund Transfer Act issues that may have prevented consumers from understanding their accounts and may have led to expensive fees. NCUA also flagged Truth in Lending Act compliance problems where credit unions did not provide complete and accurate disclosures to their members or correctly calculate the finance charge for certain consumer loans.
