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Michigan Credit Union League

MCUL Tracking Items on CFPB's 2015 Agenda

MCUL & Affiliates continues to keep a close eye on the Consumer Financial Protection Bureau and possible new rules it plans in 2015, in order to advocate for change and alleviate burden to Michigan credit unions. The CFPB is planning a packed agenda for 2015 highlighting two areas of critical importance to the MCUL and Michigan credit unions.

The CFPB has indicated it will be looking at areas of debt collection, mortgage servicing and arbitration as well as cases of disparate impact. Of key focus for Michigan is the CFPB’s quick timeline for a proposal targeting deposit advance products, specifically payday lenders. Recently MCUL helped defeat a bill that would have allowed payday lenders, as discussed in a previous Monitor story, to prey on consumers by charging much larger fees over longer terms through a new installment loan product. MCUL will continue to watch this bill as there is potential it may be reintroduced in 2015.

The CFPB is slated to propose rules on payday loans in February. When the CFPB proposal is issued it would be the first to group banks, nonbanks and online lenders all under the same umbrella. The proposal could impact credit unions and the NCUA’s Payday Alternative Loan (PAL) program.

Another area of CFPB focus is a potential rule targeting overdraft programs, which could be detrimental. MCUL has been tracking CFPB’s interest in this area for more than a year. In June 2013, the CFPB issued a white paper summarizing its initial findings from its analysis of overdraft practices. The white paper highlighted a number of possible consumer protection concerns, including how consumers opt in for overdraft coverage, coverage limits, transaction posting order, insufficient funds fee structure and involuntary account closures.

In July 2014, the CFPB released a second report, providing additional information about the outcomes of consumers who do and do not opt in to overdraft coverage for ATM and one-time debit transactions. The CFPB plans to release results from further studies on such programs and their effects on consumers. A possible rulemaking may include disclosures or address specific acts or practices. Michigan credit unions have expressed concern about another expansion of regulation addressing overdraft protection programs after changes to Regulation E in 2010 forced credit unions to obtain member consent for ATM and One time Debit Transactions posing a significant loss to fee income impacting their bottom line.

The MCUL will provide information in our various publications as well as links to CUNA as information develops and will continue to work with CUNA on these issues as well as regulatory issues and compliance burden from the regulatory agencies.

MCUL will continue to work with CUNA on these issues as well as regulatory issues and compliance burden from the CFPB and other regulatory agencies.

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2015-01-12 00:00:00