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NAFCU today is monitoring a CFPB webinar on the bureau's payday lending proposal, during which financial institutions will have a chance to get questions answered directly by the bureau on this rulemaking.

CFPB's 1,300-page payday lending proposal includes a NAFCU-sought carve-out for loans issued under NCUA's payday alternative loan (PAL) program, but the association still has major concerns. One concern in particular is the proposal's potential effect on credit unions' ability to exercise statutory liens as defined by the Federal Credit Union Act.

The bureau's proposal would prescribe a "full-payment test" to covered loans. Generally, it would require that a lender determine the consumer will be able to repay a loan up front without having to reborrow. This would not apply, however, to loans that generally meet the parameters of the PAL loan authorized by NCUA. This carve-out would apply for all lenders, not just credit unions.

NAFCU continues to press CFPB to use its Dodd-Frank Act exemption authority more effectively to provide credit unions regulatory relief. It has also urged CFPB to include an express exemption for credit unions conducting short-term, small-dollar loans in accordance with current state or federal laws, such as the PAL program.

NAFCU was the only financial services trade association to oppose subjecting credit unions to CFPB authority under Dodd-Frank. The association maintains that CFPB should exercise its authority to exempt credit unions from regulations aimed at bad actors.

For more information on the proposed payday lending rule, NAFCU issued a summary in a member-only Regulatory Alert. The association is also seeking member feedback on a short-term, small-dollar lending survey to help with putting together its official comment letter in response to the proposal.

CFPB recently pushed back the comment deadline on this proposal to Oct. 7.

Registration for today's webinar closed on July 22 and was only open to members of NAFCU and other financial services trade associations.