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|The Pulse 10-06-16|
Volume 5, Issue 40.5
Yesterday, the Minnesota Credit Union Network, with valuable input from the Regulatory Review Committee, responded to the Consumer Financial Protection Bureau’s (CFPB) request for comment on the Proposed Small Dollar/Payday Loan Rule.
The proposed rule would require lenders (with some exception) to determine a borrower’s ability to repay a covered loan, require specific underwriting requirements, place restrictions on repayment, cap the number of loans permitted, and require certain additional disclosures. A covered loan includes both open and closed end loans including auto refinance loans where the cost of credit exceeds 36 percent when a lien is taken on a consumer’s vehicle, or includes the right for the lender to initiate payment from a borrower’s account. The cost of credit would include the finance charges, application fees, and numerous ancillary product fees such as credit life, GAP and other similar products. Although certain exemptions from the ability to repay requirement are within the proposed rule, the exemptions do not go far enough, are onerous and confusing.
While the Minnesota Credit Union Network is supportive of the CFPB’s intent to reign in the payday lending industry, this proposal sweeps in many unintended loan products that will negatively affect credit unions. In addition, including ancillary products in calculating the all-in APR calculation will greatly prohibit credit unions from providing these products. Credit unions, as member-owned not-for-profit financial institutions, are motivated to serve their members. As drafted, this proposed rule will likely result in many credit unions not providing as many loan products to members in need of payday alternatives.
MnCUN is encouraging credit unions to submit their own comment letters and to use MnCUN's comment letter as a guide. Comment letters regarding this proposal must be submitted on or before Friday, October 7. According to the proposal’s instructions, comments may be submitted in a number of ways, including via email to FederalRegisterComments@cfpb.gov (include “Docket No. CFPB-2016-0025 or RIN 3170-AA40” in the subject line of the email) or through the Federal eRulemaking Portal, where you will also find a comprehensive summary of the proposed rule as well as instructions on alternative methods for submission.
With questions, contact MnCUN Vice President & General Counsel John Wendland.
The Life Simulation experience is designed to help credit union employees, volunteers and leadership begin to understand what it might be like to live in a typical low-income family trying to survive from month to month. The simulation will help participants understand the stress that living in a low-wage house-hold causes, in order to help credit union employees better empathize with and serve members.
This free event will be held the afternoon of November 2 at the Earl Brown Heritage Center in Brooklyn Center. It is hosted by the Minnesota Credit Union Network young professionals group, The Crew, and supported by the Minnesota Credit Union Foundation. Credit union employees of all ages and at any stage in their professional journey are encouraged to attend, particularly in the areas of Financial Education, Member Service, Lending, and Management.
The Life Simulation will take the place of the fall Crew and Financial Education Peer-to-Peer (P2P) sessions. More information and event registration is available on the MnCUN event calendar online. With questions, contact MnCUN Communications Specialist & Crew Liaison Laura Whittet by email or by phone at (651) 288-5503.
Follow the links on the stories below to read more about the outstanding programs, new initiatives and well-deserved recognition received by your peers recently. Got news of your own? Send stories, pitches, press releases and published articles to MnCUN Communications Specialist Laura Whittet.
Connect with your credit union peers and gain from high-value insight and exchange at Balance Sheet Solutions’ annual Economic and Investment Conference. The conference will be held in Eagan on Wednesday, October 26. Join Steven Rick, Chief Economist for CUNA Mutual Group; and Tom Slefinger, Senior Vice President and Director of Institutional Fixed Income Sales for Balance Sheet Solutions, as they lead discussions on the state of the U.S. economy. Minnesota Credit Union Network President & CEO Mark Cummins will also present, providing an update on the association and credit unions in the state.
Balance Sheet Solutions, LLC, is a Securities and Exchange Commission (SEC) registered advisor. Broker/Dealer transactions are facilitated through ISI, Member FINRA/SIPC. Balance Sheet Solutions (a CUSO wholly owned by Alloya Corporate FCU) provides a wide range of services to credit unions, including investment purchases, advisory services and risk management. Balance Sheet Solutions is headquartered in Warrenville, Illinois.
The credit union movement is filled with professionals and volunteers who have dedicated decades of service to building their respective institutions and the industry to what it is today. Do you know of a credit union CEO, long-time employee, or board member who is worthy of special recognition?
If so, consider paying them tribute with a Credit Union Builder Award.
Credit Union Builder is a recognition program through the Minnesota Credit Union Foundation that allows organizations to make contributions in honor of (or in memory of) a significant individual who has been instrumental in their success. The name of the recipient and the donating organization will be permanently displayed in the Minnesota Credit Union Network's lobby as a tribute to those who have dedicated time and energy to building the credit union movement. Donors are also listed in the Foundation's annual report and on the donor page online. The honorees (or their families, in the case of a memoriam contribution) also receive recognition from the Minnesota Credit Union Foundation.
A minimum $1,000 contribution is required for the Credit Union Builder Award. Contributions can be made online.
The Minnesota Credit Union Foundation, Inc., St. Paul, Minn., is a tax-exempt 501(c)(3) organization. For tax purposes, your contribution may be tax-deductible.
Join the Minnesota Credit Unions for Kids (MnCU4Kids) committee for the annual Bowl-O-Rama on Wednesday, Oct. 26 in Wyoming. This event provides credit union professionals and volunteers the chance to raise money for a great cause and have fun doing it.
All proceeds from this fundraiser will benefit Gillette Children's Specialty Healthcare and its clinics around the state, which help kids with disabilities and chronic conditions. Gillette is Minnesota’s Children’s Miracle Network (CMN) designated hospital.