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Consumer Protection Subcommittee members from across the country, representing credit unions of all sizes and with different memberships, traveled to Washington on Monday and Tuesday to meet with regulators at the National Credit Union Administration (NCUA) and the Consumer Financial Protection Bureau (CFPB). CUNA staff also participated in the meetings.
The credit unions had a full agenda as a result of the many regulatory burdens they have faced, and are currently facing. The topics discussed included:
Concerns surrounding implementing the Military Lending Act
The CFPB's payday and small dollar proposal
The CFPB’s third-party SBREFA proposal for debt collection, and potential pending first party debt collection SBREFA process
UDAAP – including the CFPB’s recent enforcement action against a credit union
Issues relating to HMDA
Overdraft protection services
During the meetings the credit union representatives provided specific examples to the NCUA and CFPB about how members have been harmed by overly burdensome regulations that have inhibited credit unions ability to serve them. As an example, they highlighting to the CFPB how it has become more difficult, particularly for smaller credit unions, to continue to operate in the mortgage market compared to the largest financial institutions. They also provided solutions for an improved HMDA rule, and urged the CFPB to delay the implementation of the rule.
In both meetings the Subcommittee urged the CFPB and NCUA to better collaborate, so that credit unions are not unfairly penalized by CFPB proposals or enforcement actions that conflict with NCUA guidance or statutory rights under the Federal Credit Union Act. They urged the regulators to work closely on any policymakings surrounding debt collection, particularly since collection activities are directly connected to safety and soundness requirements. The subcommittee questioned the NCUA whether the impact of potential enforcement actions on the National Credit Union Share Insurance Funds has been considered. They also warned that overly stringent debt collection requirements on credit unions could harm members, if they are forced to constrict providing credit.
The subcommittee expressed additional concerns about the CFPB’s proposed payday and small dollar loan rule, which could inhibit consumer friendly credit union lending in this market. They discussed some of the consumer friendly small dollar programs they offer that could be detrimentally impacted by the proposal. The credit unions expressed appreciation to the NCUA for their support of the PAL program, and for sending a letter to the CFPB urging it to exempt the PAL program and to make other changes to its proposal.
CUNA and the Consumer Protection Subcommittee will continue to engage with the NCUA and the CFPB about the issues discussed today, and will continue to advocate on behalf of credit unions and members.
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