CUNA calls on CFPB to exempt credit unions from payday rule, hold bad actors accountable

May 15, 2019


May 15, 2019 

The Consumer Financial Protection Bureau (CFPB) issued a proposal in February to rescind the mandatory underwriting provisions within its 2017 Payday Rule. Credit Union National Association (CUNA) submitted comments advocating for the Bureau to amend the payday lending rule with the addition of an unequivocal, express exemption for small dollar loans offered by credit unions. The trade association, advocating on behalf of America’s 115 million credit union members, maintains that the Bureau should aim to strike an appropriate balance between enhancing consumer protection and ensuring credit unions are about to continue serving members facing financial distress and other emergencies.  

“CUNA strongly urges the Bureau to amend the rule to avoid causing any negative effects on credit unions’ small dollar loan programs and, instead, refocus the rule on appropriately reining in unregulated and underregulated non-depository online, payday, and title lenders, particularly entities with a history of bad behavior,” wrote Senior Director of Advocacy & Counsel Alexander Monterrubio. “To achieve this goal, CUNA recommends the Bureau use its broad exemption authority under Section 1022(b)(3)(A) of the Dodd-Frank Act to exempt all small dollar loans offered by credit unions from the 2017 Payday Rule, as credit unions have set themselves apart from other actors in this market.” 

Credit unions have historically provided safe and responsible small-dollar credit to consumers, including thousands of low- or no- interest loans that were made available for federal employees affected by the recent government shutdown. CUNA notes in the letter that had the Bureau's payday rule been in effect, consumers would likely not have had access to these types of services.  

In the event the CFPB chooses not fully exempt credit unions, CUNA believes the Bureau should adopt the proposed rescission of the 2017 Payday Rule’s mandatory underwriting requirement for covered loans, and substantially expand the “alternative loan” exemption to cover additional Payday Alternative Loan (PAL) options developed by NCUA, including the proposed PAL II program.  

CUNA maintains that only an exemption of all credit union small dollar programs would guarantee that all credit unions are able to provide their members access to small dollar credit.  


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 115 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 To find your nearest credit union, visit  


Lauren Williams      
CUNA Communications