Removing Barriers Blog

CUNA Writes to House Oversight Committee Prior to Hearing on CFPB Payday Rule
Posted May 17, 2019 by CUNA Advocacy

Yesterday, the House Oversight Committee held a hearing entitled, “CFPB’s Role in Empowering Predatory Lenders: Examining the Proposed Repeal of the Payday Lending Rule." Prior to the hearing, CUNA wrote to Chairman Cummings and Ranking Member Jordan explaining how credit unions provide consumers with access to small dollar credit on safe and affordable terms.  CUNA also included a comment letter on the CFPB's Payday Rule that was submitted to the CFPB this week.

Credit unions support curbing abuses in the payday lending market while maintaining credit availability to meet consumer demand. Unfortunately, the overly-broad 2017 Payday Rule does not strike an appropriate balance between enhancing consumer protection while still ensuring credit unions are able to continue serving their members. In particular, the rule would impose burdensome requirements on credit unions’ covered small dollar loans, despite no data suggesting these programs have any pattern of harm to consumers. To the contrary, consumers have stated that credit union loans are often their safest and best option for credit 

“Credit unions believe the best path forward for regulating payday lending is to maintain the current rule with the addition of an unequivocal, express exemption for small dollar loans offered by credit unions. The 2017 Payday Rule is inappropriate as applied to credit unions based on our structure, history, and pro-consumer offerings."