A bipartisan group of Representatives, including multiple members of the House Financial Services Committee, wrote to Consumer Financial Protection Bureau (CFPB) Richard Cordray expressing concerns about the bureau’s short-term, small-dollar loan proposal. The legislators expressed fears, shared by CUNA, that the proposal has the potential to “severely restrict access” to credit, and asked the bureau to work with stakeholders to craft a final rule that protects both consumers and their access to credit.
“We all encourage rules that serve to weed out and punish those that take advantage of consumers,” the letter reads. “Yet, with this proposed rule, in an effort to keep unscrupulous actors out of the industry, the CFPB will simultaneously be harming the very consumers it is trying to protect by significantly reducing their ability to access the credit they desperately need.”
The CFPB introduced its proposal earlier this year, and CUNA is concerned that the overly broad rule will effect consumer-friendly credit union loan products, as well as other loan products that would fall within the rule’s scope.
Comments on the proposal are due Oct. 7, and CUNA is urging credit unions to make sure they submit comments to the CFPB highlighting ways consumer-friendly products will be negatively impacted.
The legislators expressed also cited credit union concerns that consumer-friendly small-dollar loan products will be impacted.
“Credit unions and community banks have indicated that they, likewise, will not be able to operate in the short-term, small-dollar lending space under the regulatory framework set forth by the proposed rule,” the letter reads.
The letter was signed by Reps. Alcee Hastings (D-Fla.), Blaine Luetkemeyer (R-Mo.), Henry Cuellar (D-Texas), Steve Stivers (R-Ohio), Bennie Thompson (D-Miss.), Mick Mulvaney (R-S.C.), Collin Peterson (D-Minn.), Patrick McHenry (R-N.C.), Kyrsten Sinema (D-Ariz.), Andy Barr (R-Ky.), Brad Ashford (D-Neb.) and Ann Wagner (R-Mo.).