Reps. Steven Palazzo (R-Miss.) and Henry Cuellar (D-Texas) successfully added an amendment to an appropriations bill Thursday that would require the Consumer Financial Protection Bureau (CFPB) to stop any rulemaking on short-term, small-dollar loans. The amendment was added to the financial services and general government appropriations bill for fiscal year 2017, which was considered Thursday by the House Appropriations Committee.
The CFPB issued its short-term, small-dollar lending proposal last week, and early analysis from CUNA raises concerns that consumer-friendly credit union products will be affected.
“We appreciate the attention the committee has given to this rulemaking. The CFPB has proposed an overly complicated rule to cover relatively simple lending for which there is considerable consumer demand,” said Ryan Donovan, CUNA’s chief advocacy officer. “If the bureau moves forward at an imprudent pace without fully understanding the market or the impact of its proposal, the consequence for borrowers could be that short-term, small-dollar credit becomes significantly less available.
“The amendment slows down the process to ensure that if the bureau moves forward it will do so after more comprehensive consideration,” Donovan added.