Press
CUNA sends letter of support for S.1916
(May 20, 2014) — Today, the Credit Union National Association (CUNA) sent a letter to the Senate Banking Committee Chairman Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) in support of S. 1916, the HELP Rural Communities Act introduced by Senator McConnell. S. 1916 would direct the Consumer Financial Protection Bureau (CFPB) to establish an application process determining whether a county should be designated as a rural area if the CFPB has not designated it as one.
On March 11, 2014, CUNA sent a similar letter to the House Committee on Financial Services regarding the House version of the bill, H.R. 2672.
Below is the text of the letter sent to the Senate Banking Committee:
The Honorable Timothy Johnson
Chairman
Committee on Banking, Housing and Urban Affairs
United States Senate
Washington, DC 20510
The Honorable Michael Crapo
Ranking Member
Committee on Banking, Housing and Urban Affairs
United States Senate
Washington, DC 20510
Dear Chairman Johnson and Ranking Member Crapo:
On behalf of the Credit Union National Association (CUNA), I am writing in support of S. 1916, the HELP Rural Communities Act introduced by Senator McConnell. CUNA is the largest credit union advocacy organization in the United States, representing America’s 6,700 state and federally chartered credit unions and their 99 million members.
S. 1916 would direct the CFPB to establish an application process determining whether a county should be designated as a rural area if the CFPB has not designated it as one. In keeping with other government agencies, the CFPB has defined “rural” by using the U.S. Department of Agriculture Economic Research Services’ urban influence codes. The designation of “rural” by the CFPB has many implications for credit unions, particularly with respect to the type of products a credit union may offer their members. For instance, the Escrow Requirements under the Truth in Lending Act Rule requires certain lenders to create an escrow account for at least five years for higher-priced mortgage loans. If those loans are made by small lenders that operate predominantly in rural or underserved counties, they are exempt from this requirement. Another example includes the Ability to Repay and Qualified Mortgage (QM) Standards Under the Truth in Lending Act Rule by which mortgage loans with balloon payments do not meet the QM standard. Like the Escrow Rule, small lenders that operate predominately in rural areas are eligible to originate balloon payment QMs.
The CFPB has announced it will reexamine the definition of “rural” over the next two years. Senator McConnell’s legislation is welcomed because it would provide a way for a person or business that resides or operates within a rural region to apply to the CFPB to get that area designated as rural. Before the Bureau could make a determination of whether a county should be designated as rural, the CFPB must take into account the definition of “rural” criteria as it is used by: the Bureau of the Census for classifying geographical areas as rural or urban; the Office of Management and Budget to designate counties as metropolitan or neither; the Secretary of the Agriculture to determining property eligibility for rural development programs; the Department of the Agriculture rural-urban commuting codes; a written opinion provided by the State’s banking regulator; and population density.
On behalf of America’s credit unions and their 99 million members, we appreciate the opportunity to express our support for this legislation. We look forward to working with you to see its enactment.
Best regards,
Bill Cheney
President and CEO