Cordray calls Berger, discusses payday rule
In a phone conversation with NAFCU President and CEO Dan Berger after the CFPB's final payday lending rule's release, CFPB Director Richard Cordray noted the impact NAFCU's advocacy had on the bureau's rulemaking to lessen its potential negative effects on the credit union industry.
While NAFCU is continuing to review the CFPB's rule on payday lending – which is 1,690 pages long – to determine its overall impact, initial reviews indicate the bureau removed parts of the rule that would have negatively impacted credit unions' ability to meet members' needs for short-term, small-dollar loans.
In particular, the final rule exempts all loans issued by credit unions in conformance with NCUA parameters for payday-alternative loans. It also contains other small lender exemptions and excludes provisions that posed the largest concerns regarding some longer-term lending.
"The changes the CFPB made from its proposed payday lending rule to its final rule will protect consumer access to credit and the credit union industry's ability to meet members' small-dollar loan needs," Berger said. "I want to thank Director Cordray and his team for listening to the concerns of NAFCU and credit unions. The bureau moved its final rule in the right direction and attempted to lessen the rulemaking's potential negative impacts on credit unions, which are the good actors in the consumer lending space."
NAFCU has been working with all stakeholders on this issue. Last month, the association hosted a small-dollar lending working group discussion with representatives from several NAFCU-member credit unions, Pew Research Center, Center for Financial Services Innovation and Filene Research Institute to discuss CFPB rulemaking and its impact on credit unions' ability to provide members' needs for affordable, safe loans.
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