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CFPB Schedules Short-Term, Small-Dollar Lending Hearing
Tuesday, May 24, 2016 6:40 AM

The Consumer Financial Protection Bureau will host a field hearing on short-term, small-dollar lending June 2, and it is expected the bureau will unveil its long-awaited rule on such loans in conjunction with the hearing. The hearing will take place in Kansas City, Mo., starting at 10 a.m. (CT).

CFPB staff has been advocating since last year that this rule should be targeted at the bad actors in the payday lending industry and should not sweep in credit union short-term small-dollar loan products, such as the NCUA’s Payday Alternative Loan (PAL) program and similar loans from state-chartered credit unions.

“Credit unions do offer a small-dollar product, called a PAL product, it is blessed into law. We think it’s a good product and we want to make sure there’s room for that under any regulations we adopt,” said CFPB Director Richard Cordray before the Senate Banking Committee in April.

CFPB Acting Deputy Director David Silberman, testifying before the House Financial Services subcommittee on financial institutions and consumer credit in February, said the proposed rule would allow PALs to “continue as essentially an exception to the general rule.”

CUNA will be reviewing the proposal in detail once it is released, and advocating for improvements if it prevents credit unions from making other, similar loans. 

The hearing will be streamed live on the CFPB’s website.