CUNA
  • Advocacy
    • Priorities we’re fighting for
    • Actions you can take
  • News
  • Learn
  • Compliance
  • Shop
  • Topics
    • Community Service
    • Compliance
    • Credit Union Hero
    • Credit Union Rock Star
    • Credit Union System
    • Directors
    • Human Resources
    • Leadership
    • Lending
    • Marketing
    • Operations
    • Policy & Issues
    • Sales & Service
    • Technology
  • Credit Union Magazine
    • Buyers' Guide
    • COVID-19
    • Digital Edition
    • Credit Union Hero
    • Credit Union Rock Star
    • Subscribe
    • Advertise
    • Contact
  • COVID-19
  • Advertise
  • Awards
    • Nominate Credit Union Hero
    • Nominate Credit Union Rock Star
  • Podcasts
  • Videos
  • Contact
Learn More about Member Value

News

Member Benefits
Learn more
Learn more about the benefits of membership.
Home » CUNA backs proposed delay of payday rule, calls for changes
Policy & Issues

CUNA backs proposed delay of payday rule, calls for changes

March 18, 2019

CUNA supports supposed the proposed delay of the compliance date for the Consumer Financial Protection Bureau’s (CFPB) payday lending rule, but also supports a delay of the entire rule, it wrote to the CFPB Monday. CUNA sent it letter in response to a proposed delay of the mandatory underwriting provisions to the rule to Nov. 19, 2020 (originally set for Aug. 19, 2019.).

CUNA believes the proposed delay would provide credit unions an opportunity to adequately prepare for implementation.

“Given the Payday Rule’s broad scope and the pending challenge to the rule’s legality in federal court, the Bureau should delay the rule in its entirety rather than merely delaying the ability-to-repay (ATR) provisions that are the subject of the rescission proposal,” the letter reads. “A delay of the entire rule is especially warranted if the CFPB intends to amend other aspects of the rule, such as the payments provisions, in the near term.”

CUNA believes the CFPB’s approach to regulating payday lending should be consistent with several broad objectives:

  • The rule should be tailored to focus on lenders who abuse consumers and entrap them in cycles of debt.
  • The rule should not inhibit credit unions from continuing to offer consumer-friendly emergency credit products to members in need. A solution could include using the Bureau’s exemption authority as credit unions have clearly set themselves apart from the actors the CFPB intends to rein in with the rule.
  • The pending rule should be revised in a manner that encourages more credit unions to enter the short-term, small dollar lending market, including:
    • Creating an express, broader exemption for credit union products using the Bureau’s exemption authority, and
    • Coordinating with the NCUA to ensure consistency with any changes to the Payday Alternative Loan (PAL) program, which currently benefits from an exemption under the current rule. The Bureau should seek to expand the PAL exemption should NCUA finalize its proposed PAL II program.

CUNA also continues to urge the CFPB to further examine and revise the rule to avoid any negative effects on credit unions’ small-dollar loans programs while still holding accountable non-depository payday lenders, especially those with histories of bad behavior.

The CFPB issued a separate proposal on additional changes to the rule, which CUNA will submit a separate letter on.

KEYWORDS cfpb
Credit Union Magazine - Spring 2021

Spring 2021

Credit Union Magazine’s Spring 2021 edition features CUNA's 2021 advocacy agenda, strategic planning guidance, and labor market insights.
Digital Edition •  Subscribe

Trending

  • ‘More listening and less attacking’

  • Movement must focus on financial well-being for all

  • Why DEI matters to credit unions

Tweets by CUNA_News

Polls

Who should be the 2021 Credit Union Hero of the Year?

View Results
More

Champion of America’s Credit Unions

Credit Union National Association is the only national association that advocates on behalf of all of America’s credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.

More CUNA

  • About
  • Careers
  • Contact Us
  • Recommended Websites
  • Privacy Policy

Resources for

  • CUNA Board Members
  • Credit Union Advocates
  • Leagues
  • Press
  • Vendors