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NAFCU and other financial services trade groups Friday sent a letter of support to Senate Banking Committee Chairman Sherrod Brown, D-Ohio, and Sen. John Kennedy, R-La., in support of the Close the Shadow Banking Loophole Act that would close the industrial loan company (ILC) loophole in current law. 

In the letter, the groups wrote “the time is now for Congress to close the ILC loophole before it is further exploited by firms seeking to gain all of the advantages of an FDIC-insured bank charter without the concomitant supervision and regulation that Congress has established for the corporate owners of full-service insured banks.”

Also Friday, Rep. Andy Barr, R-Ky., announced the introduction of the Rectifying Undefined Definitions of Abusive Acts or Practices or the Rectifying UDAAP Act. This legislation will amend the Consumer Financial Protection Act of 2010 to clarify the standards of UDAAP enforcement action brought by the CFPB. 

“The CFPB has attempted to exert its power well beyond what Congress ever intended, most strikingly with its UDAAP authority,” said CUNA President and CEO Jim Nussle and NAFCU President and CEO Dan Berger. “We applaud Rep. Barr’s efforts to rein in the CFBP’s abuse of this authority to help credit unions continue to advance communities and support the financial well-being of American families.”  

Additionally, Sen. Jack Reed, D-R.I., reintroduced the Predatory Lending Elimination Act Thursday. The legislation would impose a limitation to fees and interest charged on consumer loans through an all-in national rate cap of 36 percent, preventing lenders the ability to appropriately assess borrower risk. NAFCU and other financial services trade groups have previously advocated in opposition to this and sent a joint letter in September when it was introduced as an amendment in the Senate.

Stay tuned to NAFCU Today for the latest out of Washington.