WASHINGTON–CUNA has filed a letter with the CFPB related to its Request for Information about the use of alternative data in the credit process.
Among the points made in the CUNA letter:
- Since credit unions are already highly regulated regarding their lending practices, the trade group called on the CFPB not to require any additional mandatory reporting of data.
- CUNA did express its appreciation to the CFPB for recognizing the importance of serving consumers who may have low credit scores or other financial challenges, and willingness of CUs to encourage innovation to meet those needs.
- CUNA said credit unions are already playing an important role in meeting the needs of financially distressed consumers.
- The group cautioned the CFPB that regulatory burdens, prescriptive requirements, or complex processes for using alternative data could be counter-productive to the stated goal of increasing access to credit for more consumers. “Adding unnecessary or overly complicated compliance burdens to the process of underwriting credit has proven to be damaging to credit unions’ ability to provide safe and affordable credit,” CUNA said.
- If the CFPB moves forward with any policymaking in this area, CUNA urged it to consider how credit unions already are working with their member-owners to find ways to provide credit to consumers with low credit scores or who are facing other financial challenges. The letter includes examples of credit unions successfully doing this in the small dollar lending market.
- CUNA asked the CFPB to recognize that NCUA has already acknowledged that Low-Income Credit Unions (LICUs) and Community Development Credit Unions (CDCUs) may need more flexibility to underwrite loans and provide credit.
- CUNA further urged the CFPB to consult with the NCUA concerning whether any new reporting requirements could impact the safety and soundness of credit unions.