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News Now

Washington
CUNA DCUC urge caution with any DoD rule tweaks
WASHINGTON (2/18/07)—In a joint letter to the Department of Defense (DoD), two credit union groups said DoD accomplished its goal to target certain predatory lending practices with its rule to implement provisions of the John Warner 2007 National Defense Authorization Act. The Credit Union National Association (CUNA) and the Defense Credit Union Council (DCUC) noted that the Act was intended to stop specific predatory lending practices that have been the most harmful to military servicemembers and their families. “In our view, this objective has been accomplished primarily by limiting the impact of the rule to those creditors that offer payday loans, vehicle title loans, and refund anticipation loans (RALs),” the groups said. The letter noted that credit unions have been, and will continue to be, a “significant partner in the battle to eradicate predatory lending.” “For this reason, we would oppose expanding the scope of this rule to include other lending products, as this may unnecessarily interfere with the products offered by credit unions that would benefit military servicemembers and their families,” the letter warned. If DoD is considering that or any other change to its current rule, CUNA and DCUC advised that the department wait a “significant period of time” before making any changes to determine whether the current rule is sufficiently meeting the objectives of the 2007 Act. The letter noted a number of initiatives that CUNA and credit unions support as a means to promote consumer financial education to help Americans avoid the pitfalls of abusive lending practices and to become better managers of their personal finances. Credit unions provide financial education, in combination with responsible lending products, and thereby have enabled credit unions and their members to escape much of the direct impact of the subprime mortgage crises that is currently gripping the country. Credit unions’ traditional focus on providing financial education for consumers has been enhanced on the national level by such things as CUNA’s Financial Literacy Task Force, formed in 2006. The Task Force hosted a financial literacy summit in September of its inaugural yea and has issued “a substantive long-term strategic plan,” the letter noted. “Of specific interest to DoD, CUNA and a number of other sponsors produce a weekly one-hour radio program that focuses on financial education. This program offers consumer finance information and advice from financial services experts on topics such as mortgages, savings options, retirement plans, car buying, debt management, and more,” it added. Use the resource link below to read the complete letter.


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