WASHINGTON (10/23/15)--CUNA continues its advocacy efforts after last week’s discussion with the Consumer Financial Protection Bureau (CFPB) about overdraft protections (ODP) and followed up the meeting Thursday with a letter to CFPB staff. CUNA subcommittees traveled to Washington, D.C., last week to discuss regulatory relief with the CFPB and National Credit Union Administration.
“As noted by several credit unions during the meeting, credit union members utilize ODP and small dollar loan products in a reasonable and responsible way,” reads CUNA’s letter.
“In addition, these loan products and services are often the best financial option for these consumers. We echo the comments of the credit unions at the meeting, and request that the CFPB continue and increase its outreach to credit union members and other consumers in order to gain a complete understanding of how and when these products and services are used,” the letter says.
CUNA advocates that the CFPB remains focused on ensuring consumers understand ODP as a service, rather than actual ways to regulate the service.
However, bureau staff did suggest several possible areas of regulation, such as requiring or prohibiting a certain transaction posting order.
“We strongly believe alternatives to regulation, including consumer education, are most appropriate in the areas of ODP and small dollar lending,” CUNA's letter reads.
CUNA continues to urge the CFPB to keep its deliberate process toward addressing ODP. It is critical the agency has all the information necessary to ensure its approach protects consumers while not inadvertently harming them by making products and services more difficult to obtain.
In the letter, CUNA also highlights the compliance burdens facing credit unions.
“The compliance challenges currently imposed on credit unions--which did not cause the financial crisis and tend to be the most consumer-friendly option--are stifling their ability to effectuate their statutory mission of promoting thrift and providing credit at competitive rates,” the letter reads. “We urge the CFPB to thoroughly examine alternatives to strict regulation of ODP and small dollar loans offered by credit unions.”