CUNA Advocacy Update
July 11, 2016
July 5, 2016
CUNA Releases Summary of Small Dollar Loan Proposal:
Last week, we released an analysis of the CFPB’s proposed rule on small dollar loans, outlining several areas where credit union products could be impacted.
CUNA, ICBA Collaborate on Letter to CFPB:
In a letter sent in conjunction with the Independent Community Bankers of America, we point out to the CFPB that the proposed rule, if finalized in its current form, would unquestionably disrupt lending by credit unions and community banks, despite the CFPB’s statements that it was not their intention to do so.
The letter notes that if it was actually the Bureau’s intention for depository institutions to serve more consumers in need of short term, small dollar loans, the proposed rule falls short of that goal and will almost certainly cause credit unions and community banks to exit this marketplace.
The letter also thanks CFPB for recognizing the need for consumer friendly products from depository institutions, but also states that the proposal’s exceptions must be much broader in order to meaningfully achieve the goal of ensuring credit unions and community banks remain in this market.
CUNA to NCUA: Carefully Review Impact of CFPB Proposal:
We also sent a letter to NCUA seeking their assistance in protecting credit union products from unnecessary CFPB compliance and regulatory burdens.
The letter urges Chairman Metsger to carefully consider whether the proposal would disrupt existing lending by credit unions, and asks him to discuss the impacts with Director Cordray. We also shared our concerns that the proposed rule appears to sweep in auto refinance loans, which are not similar to payday or small dollar loans.
In particular, we noted that credit union loans do not fit into one specific category subject to a lengthy list of requirements. We are worried that if credit unions and other depository institutions are regulated out of this market, our members could be left with worse options, such as the unregulated and unlicensed predatory lenders.
We Need Your Feedback Regarding the Small Dollar Loan Proposal:
We are currently seeking widespread feedback from credit unions about how the CFPB’s small dollar proposed rule could impact credit union products and services, and we will continue to educate the Bureau about problems this rule could cause for credit unions and their members. Please check out the comment call and send comments, questions or concerns to Leah Dempsey, Elizabeth Eurgubian, Andy Price or me.
On the Hill:
The House will be in session this week and is expected to consider a number of bills, including the Financial Services and General Government Appropriations bill. This legislation was expected to have been considered prior to the Independence Day recess. The Senate returns Wednesday to take up the Defense Appropriations Bill.
The House is also expected to consider H.R. 4538, the “Senior$afe Act of 2016.” The legislation introduced by Representatives Bruce Poliquin (R-ME) and Kyrsten Sinema (D-AZ), is an important step toward improving protection for seniors by providing legal immunity for properly trained financial services employees who disclose concerns about financial exploitation of senior citizens.
There are no hearings of consequence to credit unions this week; however, next week we anticipate that the House Financial Services Committee will hold a legislative hearing on the Financial CHOICE Act (Chairman Hensarling’s regulatory reform legislation). The Committee is also expected to mark-up pending legislation before the conventions recess. The House Energy and Commerce Committee will also be holding a hearing with all five Federal Communication Commission Commissioners on July 12.
Pending Regulatory Comment Calls:
CUNA intends to comment on the following pending regulatory proposals. For our comment letter to have the greatest impact, we need to hear from you. Please consider whether and how these proposals would affect your credit union, and contact the CUNA staff listed with each proposal with your feedback
We encourage Leagues and credit unions to use PowerComment to file comment letters with regulators. For more information regarding these proposals, please follow the links below:
ICYMI – Advocacy Accomplishments Continue to Pile Up in Second Quarter:
Successes on issues ranging from the OTR methodology, examination frequency and fairness, the NCUA budget process, CFPB exemption authority, and interchange and data breach lawsuits position CUNA, Leagues and credit unions very well for the elections and the new Congress. [More]