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Call to Action! The CFPB Needs to Hear from Cornerstone CUs
Wednesday, September 7, 2016 7:00 AM

Take a stand against additional CFPB restrictions on credit union lending. Cornerstone needs you to comment by Oct. 7, 2016, in response to CFPB’s payday lending proposal. As written, the proposal would affect not only small-dollar short-term loans, but auto refinance loans too, and more!

ACTION NEEDED
Take action by sending comment letters by the Oct. 7 deadline. Tell CFPB how this proposal will affect your credit union and how you serve your members. (Scroll down for details on submitting letters.)

TALKING POINTS
Below are some suggested talking points; you may pick and choose issues on which to comment.

  • Oppose CFPB’s proposal as written
  • Tell CFPB to exempt credit unions and focus on problem actors like the payday loan and title loan industries that operate with substantially less regulation than credit unions. 
  • Remind CFPB that Congress has confirmed CFPB’s power to exempt credit unions.
  • Explain that the exemption for NCUA Payday Alternative Loans is not a true exemption; it does little to help credit unions as it still imposes new costly burdens.
  • Explain that applying the proposal to credit union auto refinance loans would result in restricting consumers’ choice of optional products.


BRIEF SUMMARY OF THE PROPOSAL

The CFPB is proposing new rules that will affect small-dollar short-term loans, auto refinances, and more. This proposal will apply to all credit unions and will do the following:

  • The proposal adds many new regulatory and compliance burdens for state and federally chartered credit unions.
  • Loans that are 45 days or less would require an ability to repay analysis and complicated underwriting if they don’t fit neatly into a narrowly drafted exception. 
  • An exemption is included for products like NCUA’s Payday Alternative Loans; however, the exemption still requires FCUs to amend their loan programs.
  • The overly broad scope of the proposal pulls in other lending products beyond small-dollar short-term loans, such as auto refinance loans.
  • Auto refinance loans that exceed an “all-in” rate of 36 percent when other products are included with the loan would be subject to burdensome new compliance aspects.
  • Restrictions would be placed on withdrawal of funds for automatic payment of loans.
  • Collection efforts for loans will be restricted.
  • Additional notices would be required.
  • Lenders would be required to track and report applicable loans.


ADDITIONAL RESOURCES


HOW TO SUBMIT COMMENTS                       

You may submit comments* in any of the following ways:

  • Email:  FederalRegisterComments@cfpb.gov. Include Docket No. CFPB-2016-0025 or RIN 3170–AA40 in the subject line of the email.
  • Electronic: http://www.regulations.gov. Follow the instructions for submitting comments.
  • Mail:  Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1700 G Street, N.W., Washington, DC 20552.
  • Hand Delivery/Courier:  Monica Jackson, Office of the Executive Secretary, Consumer Financial Protection Bureau, 1275 First Street, NE., Washington, DC 20002.


*All submissions should include the agency name [CFPB] and docket number CFPB-2016-0025 or Regulatory Information Number (RIN) 3170–AA40.

WHEN TO SUBMIT COMMENTS

Please submit your comments as soon as possible, but no later than October 7, 2016. To view comments already submitted, click here.

DON’T FORGET

Please don’t forget to share your comments with Cornerstone by emailing them to Suzanne Yashewski at syashewski@cornerstoneleague.coop. It is vital that we hear your concerns so we can best represent member credit unions on regulatory matters. We track comments, so be sure to get your participation on the record!

QUESTIONS?

Contact Suzanne Yashewski at syashewski@cornerstoneleague.coop or 512-853-8516.

ONE LAST THING
Don’t feel intimidated by the comment process; your comment letter can be short and to-the-point. A formal business letter is great, but a short and simple email works too; you don’t have to hit every talking point. Just be sure to let CFPB know who you are and how this proposal would impact the credit union and its members.

Don’t be silent on such a key issue. Write your comment letter today!