The Consumer Financial Protection Bureau (CFPB) is expected to release its short-term, small dollar lending rule Thursday, an issue in which CUNA has been extremely active. CUNA, which has been pushing the CFPB to tailor its rulemaking to bad actors in the financial marketplace, took a more aggressive approach to protecting credit union products and services, particularly in anticipation of other forthcoming bureau rules.
“Even though the proposal hasn’t been released yet, we did see an outline of the proposal last year as part of the CFPB’s Small Business Review process. In that outline, we were disappointed to see the preliminary framework included credit union products, such as the NCUA’s Payday Alternative Loan (PAL) program, and also similar loans offered by state chartered credit unions,” said Elizabeth Eurgubian, CUNA’s deputy chief advocacy officer.
“Since we’ve seen the outline, we’ve repeatedly told the CFPB that the rule should not address these products, that these are responsible loan products provided by credit unions to serve their members. The proposed rule should concentrate solely on the bad actors in this market, and not add any additional regulatory burdens to consumer-friendly small-dollar loan products,” she added.
Once the proposal is released, CUNA will be closely analyzing it to determine if consumer friendly credit union products are affected.
Over the past year, CUNA has published nearly 30 posts on short-term, small-dollar lending to its Removing Barriers Blog. Many of these highlight CUNA meetings with staff from the CFPB, NCUA, Small Business Administration and congressional officials.
Efforts from CUNA and state credit union leagues also helped Reps. Adam Schiff (D-Calif.) and Steve Stivers (R-Ohio) collect signatures on a letter calling for the CFPB to tailor certain regulations for credit unions and other small financial institutions. In total, 329 members of Congress signed the letter.
Other CUNA advocacy efforts leading up to the release of this proposal include: