ARLINGTON, Va.—NAFCU Friday sent a letter to the CFPB noting concerns it has that the Bureau’s recently released student loan “Payback Playbook” may limit credit unions’ ability to provide students with credit.
“In general, NAFCU believes that students should have access to transparent information about a variety of safe and vital financial services, specifically student loans to pay for their education,” wrote Director of Regulatory Affairs Alexander Monterrubio. “However, premature regulations on student lenders and student loan services may negatively harm the ability of well-regulated credit unions to serve this important student demographic.”
With the costs of tuition at the highest level in history, student loans are much larger than in the past, he said.
“This makes access to credit for students that much more vital, but it also increases the risk that financial institutions must incur to make student loans,” said Monterrubio. “NAFCU cautions the CFPB against proposing any drastic regulations in this market that could have the unintended consequence of increasing the regulatory burden for credit unions and thereby reducing student borrowers’ access to lower-cost credit from safe and reliable credit unions.”
Separately, NAFCU president and CEO Dan Berger Friday sent a letter to House leaders urging support for the repeal of the Durbin Amendment.
In the letter, Berger addresses merchants' “misrepresentation” of the benefits of price controls' for consumers.
“Retailers had promised to pass benefits and savings on to consumers if Congress enacted debit interchange price controls,” said Berger. “Instead, the Federal Reserve has found that this amendment has been a $36-billion windfall for merchants. Consumers are seeing little benefit, and many have seen programs such as free checking disappear, while retail prices keep rising . . . Quite simply, the Durbin Amendment is not doing what proponents said it would. It is time for its repeal.”
NAFCU also Friday sent a letter to NCUA regarding its Information Collection Request on secondary capital for low-income designated credit unions.
“In regards to reducing the burden of collecting information related to secondary capital, NAFCU believes the agency has done a commendable job of streamlining the process by which credit unions receive a low-income designation and apply for secondary capital,” wrote NAFCU Senior Regulatory Affairs Counsel Michael Emancipator. “In particular, NAFCU appreciates the agency’s recent revision of the National Supervision Policy Manual, which eased secondary capital application requirements and accelerated the approval process.
“Accordingly, NAFCU urges the agency to re-estimate the number of respondents to this information collection after the agency forecasts the number of LICUs that will apply for secondary capital in the near-future,” said Emancipator.