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CFPB Acting Deputy Director David Silberman told members of the House Financial Services Subcommittee on Financial Institutions and Consumer Credit that CFPB's upcoming payday loan rule will not hurt credit union payday alternative loans, or PALs.

During a hearing on short-term, small-dollar lending, Rep. Denny Heck, D-Wash., asked Silberman about how the CFPB rule might affect credit union PALs and similar loans from community banks. Silberman responded that he believes the rule will allow PALs to continue as an exception to the general rule.

NAFCU has repeatedly raised concerns about this issue and believes the planned rulemaking could affect credit unions' ability to make PAL loans under NCUA's small-dollar, short-term lending rule.

Rep. Roger Williams, R-Texas, brought up CFPB's authority under Section 1022 of the Dodd-Frank Act to exempt smaller institutions and asked if that authority had been taken advantage of sufficiently. Silberman said it had and that the bureau had considered how rules will impact small community banks and credit unions.

In a letter to subcommittee leaders ahead of the hearing, NAFCU Vice President of Legislative Affairs Brad Thaler urged lawmakers to press CFPB to use that authority to exempt credit unions from its rulemakings.

NAFCU President and CEO Dan Berger and staff met with Silberman earlier this week to discuss the association's concerns about overdraft and payday lending regulation. Silberman was named acting deputy director at CFPB last month and he continues to serve as associate director of research, markets and regulations there.