Credit unions are concerned about the likely unintended consequences of having to collect additional data on small business lending, CUNA wrote to the Consumer Financial Protection Bureau (CFPB) Thursday. CUNA’s letter was written in response to the bureau's request for information about the small business lending market.
“Credit unions’ not-for-profit, cooperative structure and regulatory requirements--which includes supervision by a prudential regulator that imposes specific business lending requirements--is substantially different than other participants in this market,” CUNA’s letter reads. “Credit unions also, by their very mission, seek to provide safe and affordable products and services to consumers in need. While they strongly support the intent of Section 1071 and the Equal Credit Opportunity Act, they have serious concerns about unintended consequences that could result from a rule requiring additional data collection.”
CUNA also points out that, since credit unions have unique fields of membership, any data collected by the CFPB is not likely to be useful, since it may only reflect certain geographic locations or member demographics unique to a specific credit union.
This data would be largely incomparable to that of the large Wall Street banks that do not operate within unique fields of membership.
CUNA also urged the bureau to, prior to any rulemaking in this area, engage in an advanced notice of proposed rulemaking and a small business review panel. CUNA strongly urged the CFPB to give Small Business Regulatory Enforcement Fairness Act (SBREFA) participants “ample time and comprehendable information” to fully participate in the small business review process.
“The condensed timeframe of the SBREFA process and the complexity of the outlines of rules under consideration have made it difficult for credit unions to analyze and provide feedback on all aspects of the multifaceted outlines before the 60 days ends,” the letter reads. “On several occasions, some of the major problems that the rule could cause for credit unions and members were identified after the SBREFA process.”
CUNA also requested the bureau to use the authority granted to it under Section 1071 or Section 1022 of the Dodd-Frank Act and exempt credit unions from data collection requirements.
“When rules make it expensive or difficult to access safe and affordable products and services from credit unions, consumers pay the price. This rule is a clear example of when the CFPB should use its exemption authority in a broad and meaningful way for the protection of consumers,” the letter reads. “Credit unions have no pattern of unfair lending and alternatively, are seeking ways to provide more business loans to consumers, not fewer.”