WASHINGTON–Credit unions are being dragged under the umbrella of another rule that’s the result of misdeeds in another industry, according to a comment letter CUNA plans to file later this week.
The trade group said it will be sending the comment letter to the CFPB regarding its proposed rulemaking around payday, auto title, and similar small-dollar loans. Under this proposal, lenders could either assess a borrower’s income and expenses before issuing credit or abide by a set of alternative requirements governing the terms of the loan.
Elizabeth Eurgubian, deputy chief advocacy officer and senior counsel, said that while it would seem that the CFPB’s proposal concerns just the industries that specialize in payday and auto title loans, the rule is much broader and applies to any kind of small dollar loan made by a financial institution.
“CUNA has long advocated that if there is a problem in the industry, it should be addressed directly, and not write an overly broad rule,” said Eurgubian during a call with the media.
She added that CUNA feels strongly credit unions should not be brought under rules intended to address the “bad actors in the industry.”