The Credit Union National Association (CUNA), Ohio Credit Union League (OCUL) and several Ohio credit unions brought concerns about short-term, small-dollar lending directly to the Consumer Financial Protection Bureau (CFPB) Wednesday. The bureau is expected to issue a payday lending rulemaking soon, and CUNA has been advocating that the CFPB exempt consumer-friendly, payday loan alternative products offered by many credit unions.
“We expect a proposed rule from the CFPB in the next few months, and will be asking members to contact us with their feedback,” said Elizabeth Eurgubian, CUNA deputy chief advocacy officer. “We've met with the CFPB many times on this issue to advocate for credit union exemptions from this rulemaking. CFPB staff also spoke about this rulemaking on panels at our Governmental Affairs and Attorney's conferences.”
CFPB Director Richard Cordray and Acting Deputy Director David Silberman both said recently before Congress that the CFPB would exempt the National Credit Union Administration’s payday alternative loan program from the rulemaking. CUNA urged the CFPB in the meeting to stand by these remarks.
During Wednesday’s meeting, representatives from Ohio credit unions provided examples to the CFPB about the consumer-friendly products they provide to members. They outlined the importance of small-dollar loans to the livelihoods of their members, and explained why it is essential that the CFPB's payday rule does not limit the ability of credit unions to participate in this market.
They also explained that short-term loans are often used to pay utility bills, as well as to purchase food, diapers and other emergency essentials.
Members sometimes choose these loans for non-essential, but important items, such as children's gifts or Thanksgiving turkeys, and outlined how credit unions’ unique programs are sometimes tailored to just one individual member, credit union staff told the bureau.
The message that credit union consumer-friendly alternatives do not fit into a one-size fits all rule that should be aimed at bad actors was reiterated throughout the meeting.
In attendance were OCUL President Paul Mercer; OCUL Vice President for Government Affairs Patrick Harris; CUNA Senior Director of Advocacy and Counsel Leah Dempsey; and Eurgubian.