WASHINGTON— Support for the joint resolution disapproving of the CFPB’s small business lending data collection rule, as well as concerns with the Clarity for Payment Stablecoins Act, has been shared in a letter by NAFCU to the Hill.
NAFCU said in a letter to the House Financial Services Committee ahead of its scheduled markup of several measures that it wanted to express support for the joint resolution disapproving of the CFPB’s small business lending data collection rule, as well as to concerns with the Clarity for Payment Stablecoins Act.
NAFCU noted it has advocated against the CFPB’s section 1071 rulemaking, saying its requirements would “likely stifle credit unions’ small business lending.”
A CRA resolution has been introduced in the House and Senate in attempts to overturn the rule.
“While NAFCU supports the intention of Section 1071, small institutions like community-based credit unions cannot afford the cost of complying with the wide scope of new regulatory burdens proposed by the CFPB,” wrote Vice President of Legislative Affairs Brad Thaler. “These costs would result in fewer lenders supporting our nation’s small businesses, which would in turn result in less availability of credit for small businesses.
‘Cannot Comply’
Regarding the Clarity for Payment Stablecoins Act, Thaler expressed what he said is the industry’s appreciation for the legislation’s definition of the term “insured depository institution” to include credit unions, but cautioned the committee to be careful not to unintentionally create an uneven playing field among credit unions, banks, and non-depository institutions by establishing chartering and enforcement provisions based solely on the Federal Deposit Insurance Act, with which the NCUA cannot comply, he said.
“In order to operate most efficiently, regulatory frameworks for stablecoins should acknowledge the NCUA’s role as the primary financial regulator for credit unions,” wrote Thaler. “Establishing barriers to credit union engagement with digital assets would undercut many of the financial inclusion benefits that may be realized through related technologies…The credit union industry has a long history of prioritizing the needs of underserved and low-income communities and desires to continue this important work.”
Concerns Over Fed Oversight
In addition, Thaler expressed concerns with credit unions being subject to additional oversight from Federal Reserve. “NAFCU supports enforcement and examination being left up to existing regulators for insured depository institutions,” he wrote.
NAFCU shared its perspectives on the CFPB and fees here.
Response to Potential Rulemaking on PACE Financing
Separately, NAFCU has written to the CFPB in response to a notice of proposed rulemaking that would impose ability-to-repay rules for Property Assessed Clean Energy (PACE) financing and apply the civil liability provisions of the Truth in Lending Act (TILA) for violations.
In the letter, Senior Regulatory Affairs Counsel James Akin said NAFCU is supportive of the rule, and although credit unions do not offer PACE loans, the Association is concerned about the lack of requirements to assess a borrower’s ability to repay PACE loans.
‘Complicating Foreclosures’
In addition, he stated that because PACE loans hold a superior lien position, they have priority over a mortgage lender's lien, “complicating foreclosures or sale of the mortgage to the secondary market.”
Akin noted that mortgages with PACE loans attached typically cannot be sold to Fannie Mae or Freddie Mac and are not eligible for financing through federal lending programs, and told the CFPB that PACE loans, which operate similarly to mortgage financing, need to be subject to federal consumer protection standards.
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