Removing Barriers Blog

CUNA Highlights the Credit Union Difference in Letter to Subcommittee Prior to Hearing on the Payday and Small Dollar Credit Industry
Posted May 01, 2019 by CUNA Advocacy

Prior to the Subcommittee on Consumer Protection and Financial Institutions hearing on “Ending Debt Traps in the Payday and Small Dollar Credit Industry,” CUNA wrote to Chairman Meeks and Ranking Member Luetkemeyer regarding the CFPB’s Payday Rule.

In the letter, CUNA wrote about the work credit unions did during the recent Government Shutdown.  Credit unions provide the safest and most affordable options for consumers in need of short-term and emergency credit. As a recent example, an estimated 800,000 families across the country faced financial insecurity during the recent federal government shutdown. America's credit unions embodied their structure and mission by ensuring that all impacted members had access to low- or no-interest loans with generous repayment terms.

Additionally, CUNA wrote about continued advocacy efforts to urge the Bureau to further examine and revise its rule to avoid any negative effects on credit unions’ ability to offer competitive short-term, small dollar loan programs while still holding accountable non-depository payday lenders, especially those entities with histories of bad behavior. Specifically, the Bureau’s approach to regulating payday lending should be consistent with several broad objectives:

• The rule should be tailored to focus on lenders who abuse consumers and entrap them in cycles of debt.

• The rule should not inhibit credit unions from continuing to offer consumer-friendly emergency credit products to members in need.

• The rule should be revised in a manner that encourages more credit unions to enter the short-term, small dollar lending market.