By David Morrison May 15, 2014
DETROIT — The CFPB needs strong, insightful and helpful comments from credit unions to help it target its regulations more on really helping consumers without overly burdening financial institutions, according to an former U.S. Treasury official.
“As one who has read his share of comment letters, I can say that letters and communication which offer suggestions about ways to do it better are always very helpful,” Michael Barr told credit union executives attending the National Federation of Community Development Credit Unions 40th annual conference Thursday in Detroit.
Currently a law professor at the University of Michigan, Barr served the Treasury from 2009-2010 as assistant secretary for financial institutions, an office through which he helped develop the legislation that became the Dodd-Frank Act.
Barr also cited the process the agency used to develop mortgage regulations and remittance regulations as examples of how the agency listened to industry suggestions to fine tune the current version of its rules.
Those were examples of where the CFPB used poor judgment in its proposed rule but then listened to industry advice about the rule’s impact and changed its thinking, Barr added.
In response to a question from CU Times after the presentation, Barr praised the agency’s addition of a rule allowing mortgage issues to correct mistakes in calculating loan fees on Qualified Mortgages but declined to say whether any other agency modifications might be coming or were even needed.
He also suggested that other aspects of the housing finance industry, such as lending standards imposed by Fannie Mae and Freddie Mac or by lenders themselves, were more responsible for making mortgages more difficult to obtain and he noted that a tightening of credit after a credit crisis was to some extent a predictable development.
Barr’s comments came at the end of an often humorous exposition on consumers’ particular fallibility making financial decisions and the market’s role in either helping consumers make better decisions or taking advantage of consumers’ misunderstandings and weaknesses.