COVID-19 policies should protect consumers and financial institutions | 2021-03-11
Congress Should Implement COVID-19 Policies That Protect Both Consumers and Financial Institutions, CUNA wrote to a House financial services subcommittee on Thursday. The Consumer Protection and Financial Institutions Subcommittee held a hearing on Thursday on policy options to help consumers during the pandemic.
“As Congress examines other policy options related to public health and the economic crisis, we urge you to avoid implementing certain well-meaning protections such as suspension of negative credit reports, a moratorium on collections. extended debts and forbearance periods which could put the safety and soundness of all financial institutions at risk while providing little help to consumers, ”the letter read.
CUNA is concerned about:
- Legislation that would prohibit the collection of delinquent consumer and small business loan debt or expand the scope of the Fair Debt Collection Practices Act (FDCPA);
- Legislation that would affect credit reports during the pandemic, including the suspension of the most negative credit reports and the requirement that adverse information be excluded from consumer credit reports; and
- The impact that the large volume of mortgage abstentions will have on the liquidity of mortgage agents.
CUNA also said further congressional action is needed to:
- At least temporarily remove the limit on loans to member companies for emergency loans. CUNA estimates that this would free up more than $ 5 billion in capital, creating nearly 50,000 jobs at no cost to the federal government. CUNA supports such a bill from representatives Brad Sherman (D-Calif.) and Brian Fitzpatrick (R-Pa.);
- Provide temporary flexibility to the NCUA to offer forbearance from rapid corrective action requirements; and
- Increase the arbitrary loan maturity limit of credit unions.