NACFU urges CFPB to expand its “larger market participant” definition

The National Association of Federal Credit Unions is urging the Consumer Financial Protection Bureau to expand its definition of a “larger market participant” to include large retailers that operate in the financial services arena.

The recommendation came in the form of a letter written by Dillon Shea, NAFCU’s regulatory affairs counsel, in response to the CFPB’s proposal for comment on how it should define a larger market participant subject to bureau rules.

As the bureau takes its first step towards establishing oversight of non-federally regulated entities, Shea wrote that it should avoid establishing a single threshold across all markets that would qualify an entity as a larger participant. Although it would be a simple method, it would allow large retailers such as Wal-Mart, Home Depot “and others with similarly complex financial services operations” to escape regulations, Shea wrote.

In order to capture these large entities, Shea wrote that “any merchant that exceeds a minimum gross annual sales threshold and that provides a consumer financial service or product, as defined by the Dodd-Frank Act, is a ‘larger participant.’”

The NAFCU would like the CFPB to measure the size of an entity subject to its rules on an annual basis and to allow a fixed period to comply if the size exceeds the set threshold.

In addition, NAFCU suggested that the bureau include as many markets as possible in its initial rule.

Because the bureau only recently began operating, Shea wrote that it would be more feasible for the bureau to first focus on the largest markets that currently operate with the least oversight and have the greatest potential impact on consumers.

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