WASHINGTON—CUNA president/CEO Jim Nussle and ICBA president/CEO Cam Fine sent a letter to CFPB Director Richard Cordray Monday outlining initial concerns both associations have with the Bureau’s small-dollar loan proposal.
CUNA noted that this is the first public communication the trade association has sent the Bureau since the rule was initially proposed.
Key points in the joint letter, as outlined by CUNA and the ICBA:
- “While we believe predatory or abusive lending practices deserve increased scrutiny, credit unions and community banks have no history of bad behavior when offering small dollar loans. Quite the opposite, they often offer consumer-friendly short-term credit as a service to consumers.”
- “The proposed rule, if finalized in its current form, would unquestionably disrupt lending by credit unions and community banks.”
- “The extremely complex nature of this more than 1300-page proposed rule and the compliance burdens resulting from it will force community banks and credit unions to eliminate these existing products and eliminate incentives to innovate and develop new consumer-friendly, short-term products and small dollar loans.”
- “If the Bureau’s intention is for depository institutions to serve more consumers in need of short-term, small-dollar loans, the proposed rule not only falls very short of that goal but will almost certainly cause credit unions and community banks offering short-term, small-dollar loans and similar programs like the PAL program to exit the marketplace.”