A little more than a week remains for credit unions to comment on the Consumer Financial Protection Bureau’s (CFPB) short-term, small-dollar lending proposed rule. Comments on the proposal are due Oct. 7.
Since the rule was first proposed in June, CUNA has expressed a number of concerns with the proposal, most notably that it would impact a number of consumer-friendly credit union short-term, small-dollar loan products.
The proposal also adds many new regulatory and compliance burdens for federal and state-chartered credit unions working to underwrite consumer-friendly small dollar options. The added requirements, which will apply to loans offered under NCUA’s Payday Alternative Loan program, eliminate flexibility in offering these loans and will likely cause credit unions to re-evaluate participation in the program.
The proposal’s overly broad scope also sweeps in products and services offered by financial institutions that are not similar to payday or small-dollar loans, including auto refinance loans.
CUNA has met with and written to the CFPB a number of times on the proposal, and has written to the NCUA expressing concerns as well. CUNA will provide a complete list of concerns with and suggested improvements to the proposal in its comment letter, which will be submitted next week.
Credit unions are encouraged to comment on ways the proposal will impact them, particularly with regard to short-term, small-dollar loan products.
In the video below, CUNA Chief Advocacy Officer Ryan Donovan discusses why credit unions should be sure to weigh in on the proposal, and what to include in the comments.