CFPB releases proposed rules for payday lending
The Consumer Financial Protection Bureau released proposed rules making changes to its short-term, small-dollar lending rule on Feb. 6. CUNA has called on the CFPB to revise its rule to ensure credit unions are able to continue offering short-term, small-dollar lending options for members in need, and is currently analyzing the proposal.
CUNA, in its letter sent to CFPB Director Kathy Kraninger in December, said it supports revisions to the rule that would create an express, broader exemption for credit union loan products. CUNA agrees with the bureau that payday lenders should be effectively regulated.
The LSCU is currently monitoring proposed changes and believes it is important to ensure any rules do not compromise credit unions’ ability to serve members. According to the LSCU advocacy team, it is equally crucial that payday lenders are not strengthened by a total rollback of proposed regulations.
CUNA also called for the CFPB to work with NCUA as NCUA develops additional small-dollar loan products to coincide with the Payday Alternative Loan (PAL) program. NCUA proposed an additional PAL product in May, and CUNA has suggested additional changes to that proposal.
The CFPB issued its original short-term, small-dollar loan in June 2016 with several provisions that would have negatively impacted credit unions’ presence in the market. Following intensive advocacy from CUNA, which included a 61-page comment letter and several meetings, the bureau made substantive, CUNA-supported changes to the rule in October 2017.