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CUNA and NAFCU wrote House leadership this week in support of a resolution to nullify the Consumer Financial Protection Bureau’s section 1071 rule via the Congressional Review Act. The 1071 rule—finalized in March—requires credit unions to collect and report certain data on applications for credit for women-owned, minority-owned, and small businesses.
The Senate passed the resolution last month. CUNA, Cornerstone League, and Rally Credit Union in Corpus Christi, Texas, successfully challenged the rule in court, resulting in a nationwide stay for all covered entities.
“It is important for the CFPB to not harm small businesses or small financial institutions, such as community credit unions. 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,” the letter reads. “The overly broad scope of the CFPB’s rule will substantially raise the cost of small business borrowing and require covered financial institutions to collect data on businesses that are not ‘small businesses’ by any traditional metric. Section 1071 should be appropriately tailored to ensure the health and financial needs of truly small businesses can continue to be met.”
CUNA also noted the CFPB’s tiered compliance schedule for the final rule is “aggressive even for the largest, most technologically savvy commercial lenders,” and supports efforts to establish an appropriate compliance timeline.