Removing Barriers Blog

CUNA and Ohio League Reiterate Concerns to CFPB about Small Dollar Loan Rulemaking
Posted April 13, 2016 by CUNA Advocacy

Today CUNA and league staff, as well several credit unions from Ohio, met with CFPB staff to reiterate concerns about including credit union consumer-friendly small-dollar loan products in the soon expected payday loan rulemaking. In attendance were Ohio Credit Union League President Paul Mercer, Ohio League Vice President for Government Affairs Patrick Harris, CUNA Deputy Chief Advocacy Officer & Senior Counsel Regulatory & Executive Branch Relations Elizabeth Eurgubian, and CUNA Senior Director of Advocacy and Counsel Leah Dempsey.  

During the meeting representatives from the Ohio credit union staff provided examples to the CFPB about the consumer friendly products they provide to members. They outlined the importance of small-dollar loans to the livelihoods of their members, and explained why it is essential that the CFPB's payday rule does not limit the ability of credit unions to participate in this market. They explained that these short term loans are often used to pay utility bills, and purchase food, diapers, and other emergency essentials. They also described how members sometimes choose these loans for non-essential, but  important items, such as children's gifts or Thanksgiving turkeys, and outlined how their unique programs are sometimes tailored to just one individual member. 

Credit unions also described some of the unintended consequences of the Military Lending Act, and how it has limited the ability to offer small-dollar loans. They urged the CFPB to keep this in mind and not  create a similar, one-size fits all rule for credit unions products.  

We've met with the CFPB many times about this rule to advocate for credit union exemptions from this rulemaking. CFPB staff also spoke about this rulemaking on panels at our Government Affairs and  Attorney's Conferences. 

We expect a proposed rule from the CFPB in the next few months and will be asking members to contact us with their feedback.