36 percent consumer lending cap impacts affordable credit
Published by: Emily Leite
August 11, 2021 | Regulatory
Providing members with access to safe and affordable credit is what your credit union does best. That’s why the League relentlessly advocates on your behalf for a regulatory environment that empowers member service and guards against changes that can inhibit how you deliver it. So when the U.S. Senate Banking and Housing Committee Chairman Sherrod Brown (D-OH) joined Senator Jack Reed (D-RI) and other Committee and Senate leaders in reintroducing the Veterans and Consumers Fair Credit Act, we went to work with CUNA to connect Ohio credit unions with Chairman Brown to talk about the proposal’s impact to successful, consumer-friendly and affordable small-dollar lending programs. The Act seeks to rein in predatory payday lenders and other costly loan product providers by extending the Military Lending Act’s 36% all-in interest rate cap to cover veterans and all Americans. While federally chartered credit unions participating in the NCUA PALs program would be exempt, most Ohio credit unions would be subject to the more restrictive, all-in interest rate cap standard moving forward, effectively restraining small-dollar lending programs currently available to members. We will continue working with CUNA and Chairman Brown’s office to illustrate how limiting access to credit will bring unintended consequences to consumers that need affordable and emergency capital from their trusted financial partner, like your credit union.
Connect with Chief Advocacy Officer Emily Leite for any questions or concerns regarding the 36% rate cap proposal or if your credit union would like to share a successful small-dollar lending story with Congress.
Contact Emily Leite for questions or assistance.
