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HCUA, Federal Lawmakers Share Concerns with CFPB Proposed Small Dollar Loan Rule

The Heartland Credit Union Association (HCUA) shared concerns with the Consumer Financial Protection Bureau (CFPB) on behalf of member credit unions regarding its proposed rule concerning payday, vehicle title and covered loans. The deadline for comments was October 7. 

Nationwide and in Kansas and Missouri, credit unions have expressed serious concern that the overly broad scope of the CFPB’s proposed rule will sweep in products and services offered by credit unions that are not even similar to a payday or small dollar loan. In addition, it adds in new regulatory and compliance burdens for federal and state-chartered credit unions. 

"The Heartland Credit Union Association agrees that consumers should be protected from abuses in the small dollar credit system. Due to the safe and affordable manner credit unions have achieved this goal, we are asking the CFPB that it not disrupt these valuable programs offered to the consumers we serve," writes Brad Douglas, HCUA president/CEO. 

The letter highlights issues with the proposed rule, particularly that it may cause roadblocks for credit unions trying to offer much-needed, small-dollar loans and hurt consumers in Kansas and Missouri. 

Read HCUA's comment letter here

HCUA’s letter uses examples shared by credit unions in Missouri and Kansas to illustrate how credit unions are helping consumers. In addition, HCUA urged Kansas and Missouri credit union employees to share examples of how their credit union helps members in times of need with small dollar loans. Early estimates put the number of comment letters received on the pending proposal at more than one million.

A bi-partisan group of 12 U.S. House members also sent a comment letter to the CFPB regarding the small dollar loan proposal on October 3, urging the CFPB to not make more restrictive rules and close off access. Those signing the letter include Missouri U.S. Representatives Ann Wagner (R-MO District 2) and Blaine Luetkemeyer (R-MO District 3), who both serve on the House Financial Services Committee.