9 THE NAFCU JOURNAL May–June 2023 refinancing without an appraisal and regardless of income/credit score, and misrepresented the amount of monthly payments or annual savings. RMK Financial is a repeat offender, which the CFPB has been targeting, as evidenced by its creation of a repeat offender unit and a proposal to create a repeat offender registry. This also highlights the CFPB’s focus on mortgage lenders and protecting servicemembers. What we’re watching for: SCOTUS agreed to hear a case that has the potential to dismantle the CFPB and create confusion for financial institutions “NAFCU supports the continued operation of the CFPB to ensure consistency in the financial market, but has long held that the CFPB should be led by a bipartisan commission and credit unions should be exempt from CFPB jurisdiction and solely regulated by the NCUA.” and other regulators not subject to congressional appropriations. The case dates to 2017, when the payday lending industry’s lobbying group—the Community Financial Services Association of America—brought a suit against the CFPB alleging that its 2017 payday lending rule was issued unlawfully, arguing among other things that the CFPB’s funding structure is unconstitutional. The Fifth Circuit Court of Appeals agreed, vacated the Payday Lending Rule, and ruled that the CFPB’s funding structure is uniquely unconstitutional because it receives funding through the Federal Reserve rather than through congressional appropriations. However, further complicating the issue, the Second Circuit Court of Appeals in March gave a contradictory ruling as it argued the bureau’s funding structure is constitutional as Congress authorized its funding through the Consumer Financial Protection Act. NAFCU supports the continued operation of the CFPB to ensure consistency in the financial market, but has long held that the CFPB should be led by a bipartisan commission and credit unions should be exempt from CFPB jurisdiction and solely regulated by the NCUA. SCOTUS will hear arguments on the case during its October 2023 term.
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