CUNA supports a Senate resolution of disapproval (S.J. Res. 32) against the Consumer Financial Protection Bureau’s rulemaking on section 1071 of the Dodd-Frank Act, sponsored by Sen. John Kennedy, R-La.
The 1071 rule—finalized in March—would require credit unions to collect and report certain data on applications for credit.
“Credit unions support the goals of section 1071 and seek to provide all members with fair and equitable financial opportunities. That said, it remains important for the CFPB to not harm small businesses or small financial institutions, such as community credit unions, in the process,” the letter reads.
“There is widespread concern that Section 1071’s complexity and significant costs will weigh disproportionately on credit unions in ways that ultimately lead to fewer and less favorable outcomes for all small business borrowers,” it adds.
CUNA notes the overly broad scope of the final rule will “substantially” raise the cost of small business borrowing.
“Section 1071 should be appropriately tailored to ensure the health and financial needs of truly small businesses can continue to be met,” the letter reads. “Furthermore, the tiered compliance schedule established by CFPB is aggressive even for the largest, most technologically savvy commercial lenders.
“We support efforts to establish an appropriate compliance timeline for Section 1071 so that credit unions and their vendors have sufficient time to effectively implement these complex changes,” it adds. “CUNA fully supports your efforts to rein in the CFPB and its imposition of this burdensome regulation on credit unions and other community financial institutions.”