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November 19, 2015
NAFCU airs concerns with CFPB on payday rulemaking
NAFCU Regulatory Affairs Counsel Alexander Monterrubio raised concerns about potential unintended consequences resulting from future CFPB rulemaking on payday lending in a letter Wednesday to the bureau.
Monterrubio reiterated NAFCU's concerns that CFPB's planned rulemaking could affect credit unions' ability to make loans under NCUA's small-amount, short-term lending rule, which NCUA calls the "payday alternative loan" (PAL) rule.
"NAFCU and our member credit unions believe that a blanket rule regulating all parties indiscriminately – good actors and bad actors alike – is likely to hinder the ability of credit unions to serve their members' financial needs," Monterrubio wrote. "We strongly urge the CFPB to carefully craft any future rulemaking to ensure credit unions are not forced to withdraw from providing a viable alternative to predatory payday lenders."
Monterrubio emphasized that credit unions are responsible lenders and that PAL loans are structured to protect members from high-cost, predatory payday loans. He also noted that further restriction of PAL loans would push credit unions out of the market – hurting consumers.
Monterrubio urged CFPB to focus its future rulemaking on largely unregulated predatory payday lenders and to include an express exemption for credit unions conducting short-term, small-amount loans in accordance with current state or federal laws, such as the PAL loan program.
Monterrubio reiterated NAFCU's concerns that CFPB's planned rulemaking could affect credit unions' ability to make loans under NCUA's small-amount, short-term lending rule, which NCUA calls the "payday alternative loan" (PAL) rule.
"NAFCU and our member credit unions believe that a blanket rule regulating all parties indiscriminately – good actors and bad actors alike – is likely to hinder the ability of credit unions to serve their members' financial needs," Monterrubio wrote. "We strongly urge the CFPB to carefully craft any future rulemaking to ensure credit unions are not forced to withdraw from providing a viable alternative to predatory payday lenders."
Monterrubio emphasized that credit unions are responsible lenders and that PAL loans are structured to protect members from high-cost, predatory payday loans. He also noted that further restriction of PAL loans would push credit unions out of the market – hurting consumers.
Monterrubio urged CFPB to focus its future rulemaking on largely unregulated predatory payday lenders and to include an express exemption for credit unions conducting short-term, small-amount loans in accordance with current state or federal laws, such as the PAL loan program.
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