CFPB Payday Rule Nods to Credit Union Concerns, NAFCU Reviewing for Full Impact

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FOR IMMEDIATE RELEASE

The Consumer Financial Protection Bureau (CFPB) released a final rule on payday lending today that, based on an initial review, appears to address credit union industry concerns over potentially negative impacts on credit unions' ability to meet members' needs for short-term, small-dollar loans.

The final rule appears to exempt loans issued by credit unions in conformance with NCUA parameters for payday-alternative loans. The National Association of Federally-Insured Credit Unions (NAFCU) is reviewing the rule, which is 1,690 pages long, to determine its overall impact.

"In a marketplace well-populated by abusive operators, NAFCU is looking for ways that credit unions – the good actors in the consumer lending space – can offer more payday alternatives to their members," said Carrie Hunt, NAFCU's executive vice president of government affairs and general counsel. "What credit unions and consumers need is for the CFPB to focus on bad actors."

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.

NAFCU last year warned the CFPB that its proposed payday lending rule was so broad and complex that it threatened to impede consumer access to credit and negatively affect the credit union industry. Today's final rule omits provisions from that proposal that posed the largest concerns regarding some longer-term lending.

The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or  on Twitter.

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