WASHINGTON–The credit union trade groups have sent comment letters to the CFPB on proposed changes to the ECOA and Reg B, as well as on data collection rules.
The Defense Credit Union Council has provided formal comments to the Consumer Financial Protection Bureau regarding its proposed amendments to the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B.
In the letter, DCUC expressed general support for the CFPB’s efforts to clarify regulatory requirements and reduce compliance uncertainty.
Key Areas of Support
DCUC said the letter highlights key areas of support, including:
- Disparate Impact Claims: DCUC said it agrees with the CFPB’s proposal to align Regulation B with the ECOA’s statutory language, which does not authorize disparate impact claims. “This change is expected to provide greater regulatory clarity and more consistent enforcement, while continuing to protect consumers from discrimination.”
- Discouragement Provisions: DCUC said it supports revisions clarifying what constitutes prohibited discouragement of credit applicants. DCUC urges the CFPB to retain language that encourages lenders to actively reach out to underserved groups, an important practice for credit unions serving military communities.
- Special Purpose Credit Programs: DCUC said it welcomes regulatory updates aimed at preventing discriminatory use of special purpose credit programs by for-profit organizations, but stresses that credit unions must maintain flexibility to partner with community organizations to expand access to credit.
‘Deeply Committed’
“Credit unions are deeply committed to fair and inclusive lending, particularly in support of our military members and their families,” DCUC Chief Advocacy Officer Jason Stverak said in a statement. “We appreciate the CFPB’s efforts to streamline regulatory requirements and provide clear guidance that allows credit unions to innovate and serve their members effectively.”
Comment on Changes to Data Collection Rules
Meanwhile, America’s Credit Unions told the CFPB in a letter that its data collection rule appropriately balance the goals of transparency and fair lending enforcement with the practical challenges credit unions face. ISection 1071 of Dodd-Frank authorizes the CFPB to collect data from small business lenders. The current proposed rule updates the CFPB’s 2023 rule (under the previous administration) that would have created burdens for credit unions and challenges for both lenders and small businesses.
“Meaningful progress has been made and many concerns raised by credit unions have been positively addressed,” according to the letter, which says that progress includes:
- Raising the definition of a covered financial institution to 1,000 covered transactions (up from 100)
- Redcuding the gross annual revenue threshold for a “small business” to $1 million or less (down from $5 million)
- Removing discretionary data points that were included in the 2023 final rule to streamline data collection, reduce operational burdens, and simplify discussions with applicants
- Replacing the tiered compliance schedule with a single compliance date of Jan. 1, 2028, for all covered financial institutions that originated at least 1,000 covered transactions for small businesses in each of calendar years 2026 and 2027
- Eliminating several non-statutory requirements that previously dictated exactly when and how lenders had to collect applicant-provided demographic and ownership data.
America’s CUs noted the letter also includes additional suggestions to aid compliance, ranging from a $50,000 minimum threshold for covered transactions, encouraging the CFPB to release only aggregated data at the state level, and requesting Federal Home Loan Banks be explicitly excluded from the final rule, among others.
Letter on SBA Lending Rule
Separately, DCUC sent formal comments to the CFPB regarding its proposed revisions to the Small Business Lending Rule.
DCUC noted it expressed support for the CFPB’s efforts to streamline the rule, reduce complexity for lenders, and improve data quality. DCUC also reiterated its longstanding position that credit unions should be exempt from Section 1071 reporting requirements due to their unique lending models and member business lending caps, which limit the usefulness of such data and impose unnecessary regulatory burdens.
Key Points
Key points in the DCUC letter include:
- Support for Narrowed Scope: DCUC said it supports the CFPB’s move to narrow the rule’s scope, focusing data collection on core lending products such as loans, lines of credit, and credit cards, while excluding merchant cash advances, agricultural lending, and small-dollar loans under $1,000. DCUC recommends further expanding the small-dollar loan exemption to $5,000.
- Increased Coverage Threshold: DCUC said it backs raising the covered transaction threshold from 100 to 1,000, and recommends raising it further to 2,000 to better protect smaller lenders and credit unions from undue burden.
- Reduction of Data Collection: DCUC said it strongly supports limiting data collection to only those data points expressly required by Section 1071, urging the removal of discretionary data points that add complexity without significant benefit.
- Extended Compliance Timeline: DCUC endorses the CFPB’s proposal to establish a uniform compliance date of January 1, 2028, allowing financial institutions adequate time to prepare for the rule’s implementation.
‘Critical Role’
“Credit unions play a critical role in serving military communities, and regulatory requirements must reflect their unique structure and capabilities,” Stverak said in a statement. “We appreciate the CFPB’s efforts to reconsider and refine Section 1071 regulations, and we urge the agency to exempt credit unions or, at minimum, adopt changes that reduce unnecessary burdens while preserving the rule’s intent.”
