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Yesterday, 18 credit union leagues and associations filed an amicus brief in support of America’s Credit Unions’ recent federal lawsuit challenging the Consumer Financial Protection Bureau’s (CFPB) final rule that sets a fee cap on overdraft protection programs. Collectively, leagues and associations that filed the amicus brief represent 3,237 credit unions and 105,000,000 credit union members.
The amicus brief highlights the significance of credit unions’ unique member-owner relationship that is fundamental to their mission of serving their communities. The CFPB’s final rule focuses on calculating costs and assessing fees, failing to account for credit unions’ unique capital and operational realities. The final rule was developed with data from five financial institutions that does not represent the diversity of the financial services industry.
"We stand united with our peers across the nation in protecting the unique relationship between credit unions and their members," said Juan Fernandez, CEO of Luminate. "The CFPB's final rule fails to account for the operational realities of our institutions and the critical role overdraft programs play in offering members a safety net. Without this option of a safety net, members would have no choice but to turn to predatory lending institutions when they are in need. This legal challenge underscores our commitment to ensuring that financial services remain fair, accessible, and tailored to the needs of the communities we serve."
The CFPB’s finalized rule disregards decades of precedent set by the Federal Reserve Board. The amicus brief argues the CFPB has overstepped its statutory authority by attempting to classify overdraft services as extensions of credit under the Truth in Lending Act and has failed to consider the broader economic and operational impacts of the rule. Ultimately, the rule threatens to reduce access to financial services in rural areas and underserved communities which directly goes against the mission of credit unions.
The 18 state credit union leagues/associations represented by the amicus brief include:
- California Credit Union League
- Carolinas Credit Union League
- Cooperative Credit Union Association
- Cornerstone League
- Illinois Credit Union League
- Kentucky's Credit Unions
- Luminate Louisiana Credit Unions
- Michigan Credit Union League
- Minnesota Credit Union Network
- Mississippi Credit Union Association
- Nebraska Credit Union League
- Nevada Credit Union League
- New York Credit Union Association
- Ohio Credit Union League
- Tennessee Credit Union League
- The League of Credit Unions & Affiliates
- Utah's Credit Unions
- The Wisconsin Credit Union League
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