Newsroom
Berger asks Bureau to revisit section 1071 proposed rule data collection projections in light of potential SBA direct lending program
NAFCU President and CEO Dan Berger Monday wrote to CFPB Director Rohit Chopra to address the Bureau's proposed rule to implement changes made by section 1071 of the Dodd-Frank Act and its likely effects as related to a proposal in the Build Back Better Act to authorize the Small Business Administration (SBA) to establish a direct 7(a) lending program.
The Bureau’s section 1071 proposed rule would require credit unions and credit union service organizations (CUSOs) that originated at least 25 covered small business credit transactions in each of the two preceding calendar years to collect and report certain small business credit application data, including data related to the ethnicity, race, and sex of business applicants’ principal owners.
While NAFCU will respond more fully to the Bureau’s section 1071 proposed rule during the comment period, Berger expressed time-sensitive concerns regarding the interaction between the proposed rule and proposed direct lending authorization.
"Not only does the legislative proposal risk the SBA becoming credit unions’ direct lending competitor, but the legislative proposal also risks fintechs, who have never been permitted to originate 7(a) loans, driving credit unions entirely out of 7(a) lending," wrote Berger. "And the proposed rule, if adopted as written, would cause many credit unions to exit the business lending market altogether.
"Operating alongside one another, the legislative proposal and the proposed rule risk greatly damaging the vibrant, robust business lending market without which continued and broader small business successes are impossible," Berger added.
Berger encouraged the Bureau to examine the areas where the Bureau's proposed rule and the SBA direct lending program may have negative impacts on the credit union industry's involvement in small business lending.
The association has repeatedly advocated for the exclusion of credit unions from any burdensome rulemaking requiring financial institutions to collect and report data related to small business lending, noting the constraints credit unions face associated with the implementation of the data collection. NAFCU sent members a Regulatory Alert breaking down the proposal and soliciting credit union feedback.
Read Berger's full letter here. NAFCU remains steadfast to ensure this provision is excluded from the budget reconciliation proposal and will continue to engage Congress to advocate against provisions that would further complicate the direct lending process.
Share This
Related Resources
Add to Calendar 2024-04-24 14:00:00 2024-04-24 14:00:00 Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage About The Webinar Join us to learn more about network lending, a cooperative model allowing credit unions to optimize liquidity and achieve loan growth. Discover how credit unions can participate in loan pools with other institutions, allowing them to diversify portfolios, access loans with potentially lower risk and higher yields, and expand lending capacity without necessarily needing a surge in deposits. Delve into how credit unions can pool their resources, set common underwriting and pricing standards, and collectively originate, buy, and sell loans to optimize liquidity management. Hear from your peers about best practices, case studies, and practical strategies to harness the full potential of network lending and how it's helped their credit unions. Don't miss this valuable opportunity to learn how to strengthen your credit union's position in today’s competitive environment. Key Takeaways: How network lending differs from traditional lending The benefits of participating in loan pools with other credit unions How credit unions can set common underwriting and pricing standards and collectively originate, buy and sell loans to optimize liquidity management Why network lending is critical to loan growth Register Here Web NAFCU digital@nafcu.org America/New_York public
Optimize Liquidity, Maximize Loan Growth: The Network Lending Advantage
preferred partner
LendKey
Webinar
Add to Calendar 2024-04-23 14:00:00 2024-04-23 14:00:00 Monitoring the Latest Litigation Risks Credit unions’ operations pose litigation risks, with more of these cases being filed as class action lawsuits. In this Monitoring the Latest Litigation Risks for Credit Unions webinar, you’ll review some of the specific kinds of lawsuits impacting credit unions and what potential claims could be on the horizon. You’ll also examine some options for mitigating risks. Key Takeaways Review the current lawsuit trends. Understand the potential claims risks Explore options for mitigating risks. Register Now $295 Members | $395 Nonmembers(Additional $50 for USB)One registration gives your entire team access to the live webinar and on-demand recording until April 23, 2025Go to the Online Training Center to access the webinar after purchase » Who Should Attend NCCOs NCRMs Compliance and risk titles Education Credits NCRMs will recieve 1.0 CEUs for participating in this webinar NCCOs will recieve 1.0 CEUs for participating in this webinar Web NAFCU digital@nafcu.org America/New_York public
Monitoring the Latest Litigation Risks
Credits: NCCO, NCRM
Webinar
The Bottom Line on Insurance Tracking and Collateral Protection
Strategy
preferred partner
Allied Solutions
Blog Post
Resiliency In Your Incident Response Plan
Cybersecurity
preferred partner
DefenseStorm
Blog Post
Get daily updates.
Subscribe to NAFCU today.