Rift in CU Movement Re-Emerges Over Predatory Lending Bid

WASHINGTON – A group of consumer advocacies, including the Center for Responsible Lending, an affiliate of the leading community development credit union Self Help CU, called on the Department of Defense yesterday to reject requests from the credit union and banking lobbies for broad exemptions from the new 36% cap on all consumer loans to military personnel. In a comment letter filed with the Pentagon, which is writing rules for the new anti-predatory lending law, the group said that carving out exemptions for credit unions and banks on voluntary products and services and exempting fees from the calculation of the rate would undermine the intent of the new law. “The 36% cap on interest rates leaves plenty of room for banks and credit unions to do business responsibly,” said Col. Michael Hayden, deputy director of government relations for the Military Officers Association of America. The request, coming after CUNA asked for a variety of loopholes for products and services, threatens to broaden the rift between credit unions and consumer groups, like the Consumer Federation of America and Consumers Union, which fought the credit union-backed effort for a bankruptcy reform bill.