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Credit Unions Attend CFPB Hearing on Small-Dollar Lending

Kansas and Missouri credit union representatives attended the Consumer Financial Protection Bureau’s (CFPB) field hearing on its payday lending/small-dollar lending proposal on June 2. There was a capacity crowd for the event in the Kansas City Music Hall. Attendees from six credit unions and the Heartland Credit Union Association (HCUA) were scheduled to take part.

CFPB Director Richard Cordray began the meeting and pointed out that credit unions work to address these small dollar loan needs in their communities, praising those efforts. However, credit union industry analysis of the proposal has found that consumer-friendly credit union products appear to be impacted by the reforms intended to affect predatory lending practices. Click here to read an analysis developed for HCUA in consultation with Washington, D.C. analysts.

A panel discussion of government and industry officials and consumer advocates from across the country included Keith Sultemeier, Kinecta Federal Credit Union president/CEO. Sultemeier highlighted his credit union’s efforts to provide small-dollar loans and help their community. He also urged the CFPB to exempt credit unions from the proposed rule and any additional regulatory burden and focus instead on those making predatory loans. Otherwise, there is concern of a chilling effect on the availability of small dollar loans from credit unions.

“While credit unions are not-for-profit, we have a responsibility to our members,” says Sultemeier. “We fear we may be approaching the point where we can no longer provide these smaller dollar loans and also be good stewards of our members’ money.”

Comments are due to the CFPB by October 14, 2016. HCUA will have additional information and details moving forward.