Credit unions oppose specific CFPB Reg E changes in stablecoins proposed rule
Outlining concerns with the CFPB’s proposed rule regarding stablecoins, America’s Credit Unions addressed specific issues with the changes to the Electronic Fund Transfer Act (EFTA) and Regulation E in a letter sent to the agency.
“Altering the balance of responsibility established under EFTA by requiring credit unions to absorb a greater share of financial losses does not make the financial sector safer or more secure; instead, it enables further exploitation of the law to further fraudulent schemes,” America’s Credit Unions Director of Innovation and Technology Andrew Morris said in a letter to CFPB acting Director Russell Vought. Another concern related to the proposal was the bureau’s decision to advance substantive changes to Regulation E through an interpretive rule.
“While we are appreciative of interpretative changes which ensure nonbanks who provide consumer financial services comparable to those of credit unions and banks are held to equivalent standards and supervisory expectations, an interpretive rule is not the appropriate vehicle for expanding the reach of Regulation E,” Morris wrote. “Fundamentally, a formal rulemaking will ensure a broader range of perspectives, and a more fully developed understanding of any unintended consequences that the changes could pose upon the financial industry and the stability of the dollar.”
America’s Credit Unions supports efforts to ensure a fair playing field exists in the market for payments, regardless if they are conducted in dollars or virtual currencies, but opposes any expansion of credit union liability for unauthorized transactions.