Early Analysis - Credit Unions See Numerous Improvements in CFPB Final Short-Term, Small Dollar Rule

October 5, 2017


Contact: Vicki Christner – CUNA Communications; 202-329-9950

Washington, DC (October 5, 2017) – The Consumer Financial Protection Bureau’s (CFPB) final short-term, small-dollar rule appears to have addressed many concerns addressed by CUNA, leagues and credit unions, a big win for the credit union movement. CUNA continues to analyze the nearly 1,700-page final rule.

“When I spoke with Director Cordray today, I thanked him for directly addressing many concerns credit unions raised with the proposed rule,” said CUNA President/CEO Jim Nussle. “We are pleased the CFPB heeded our recommendations concerning a full exemption for the NCUA Payday Alternative Loan (PAL) program and the many other changes that were made to accommodate consumer-friendly small dollar loan programs at credit unions, including a more common-sense approach to which loans are covered.”

Initial analysis appears to find positive improvements from the proposed version, including:

  • A full exemption for the NCUA’s PAL program;
  • An exemption that applies to most loans that are over 45 days with no balloon payments;
  • An exemption for providers issuing fewer than 2,500 covered loans per year that represent no more than 10% of revenue;
  • Notice and debit requirements that apply to most loans do not apply to credit unions that make loans to their own members, as long as the payments do not trigger overdraft or non-sufficient funds fees;
  • The CFPB’s use of Regulation Z (which implements the Truth in Lending Act) to define the cost of credit, rather than its originally proposed definition of a new “all-in annual percentage rate;”
  • Exemption for certain salary advances.

The rule as originally proposed swept in a number of credit unions short-term, small-dollar loan products. CUNA wrote a 61-page comment letter in October 2016, outlining why the CFPB should make significant changes to the proposed rule to ensure credit unions are not impacted. CUNA meetings with the bureau outlining the same issues date back to when it was first proposed in June 2016, all the way to Wednesday of this week, when CUNA’s Consumer Protection Subcommittee discussed the rule in a meeting with bureau staff.

Seeing major changes to the rule was a primary goal of CUNA’s Campaign for Common-Sense Regulation, launched earlier this year.


About CUNA
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 110 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit