CUNA supports efforts for increased financial equity but believes the Consumer Financial Protection Bureau’s (CFPB) proposed data collection under Section 1071 of Dodd-Frank could present unintended consequences. Section 1071 of the Dodd-Frank Act requires financial institutions collect and report certain data regarding applications for credit for women-owned, minority-owned, and small businesses.
The CFPB released its proposal in October and CUNA issued an action alert last month calling on credit unions to submit comments on the proposal, resulting in more than 900 comments.
“Credit unions support the goals of section 1071 and seek to provide all members with fair and equitable financial opportunities,” the letter reads. “That said, we are concerned about the potential for unintended consequences and substantial costs of compliance associated with the creation of a broad data collection where one does not currently exist.”
The letter adds that credit unions—as entities bound to serve a specific field of membership—would likely collect data incomparable to other lenders that serve anyone that can access its facilities or website.
CUNA calls on the CFPB to consider the following revisions to ensure a balance of consumer protections and the availability of credit for small businesses:
CUNA also submitted a separate joint letter with the National Association of Federally-Insured Credit Unions highlighting the need for common sense definitions, appropriate coverage thresholds, and a reasonable, phased mandatory compliance schedule.