WASHINGTON—The CFPB is creating a small business lending rule that would be “overly burdensome” for credit unions, according to CUNA.
Responding to the Bureau’s request for information related to the small business lending market, CUNA sent a comment letter to the agency.
The letter’s key points, according to CUNA:
- Credit unions strongly support the intent of Section 1071 of Dodd-Frank and seek to provide all members with opportunities such as the ability to start or own a small business when it is possible to do so
- However, credit unions are concerned about the likely unintended consequences of having to collect additional data, which because of their diverse and unique fields of membership would not align with practices for collecting data by the large Wall Street banks and other financial service providers
- Additionally, since credit unions have unique fields of membership, any data collected in these efforts would likely not be useful for the intended purpose, since it may only reflect certain geographic locations or member demographics unique to a specific credit union. This data would be largely incomparable to that of the large Wall Street banks that do not operate within unique fields of membership
- It would also quite arguably do more harm than good to create additional regulatory barriers for credit unions seeking to provide member business loans. Comparable data collection requirements as suggested by the CFPB in this RFI have proven to be extremely burdensome to credit unions and will likely impact credit union participation in the mortgage lending market.