PRESS RELEASE
June 14, 2007
ARLINGTON, Va. — NASCUS submitted a comment letter on June 8 to the Department of Defense (DoD) on the proposed rule implementing the consumer lending provisions in Defense Authorization Act for Fiscal Year 2007 (Act).
Following the passage of the Act last year, NASCUS communicated with the DoD on how regulations to implement the consumer lending provisions should be structured to avoid unintended consequences to military personnel and their families. NASCUS responded to a request for comments on the Act in January and met with DoD staff in March to provide the state regulatory perspective on the consumer lending provisions.
The proposed rule addresses a number of items NASCUS previously discussed with DoD, while maintaining the necessary protections from payday, title and tax anticipation lenders that may have taken advantage of our military personnel and their dependants.
“Successful execution of the Act requires clear standards and diligent review by regulatory agencies and the financial community,” stated NASCUS. “Working together, we are confident that we can prevent unintended consequences of the proposed consumer lending standards to our military personnel and families.”
DoD sought comment about whether the final regulation should exclude regulated banks, credit unions and savings associations and their subsidiaries from coverage by the regulation generally or in limited circumstances. NASCUS responded that it would be useful to depository institutions if there were a limited exclusion from coverage by the regulations.
Additionally, NASCUS advocated that credit unions and other financial institutions regulated by a state regulatory authority should be included in the referenced exclusions. As written, the proposed regulation excludes credit unions and savings associations from the Act if they are subject to supervision and regulation by a federal regulatory agency. To recognize state authority, NASCUS asked that the language be expanded to include state and federally chartered banks, credit unions and thrift institutions.
In its letter, NASCUS emphasized that state regulatory agencies must gain a thorough understating of the consumer lending provisions included in the Act to ensure enforcement of the provisions. “Adequate time must be provided so that state regulators understand what state-chartered credit unions must do to comply with the regulation,” said NASCUS.
NASCUS appreciates the opportunity to comment on DoD’s proposed rule. To review NASCUS letters to the Department of Defense, click here.
Information
Contact:
Kate Hartig, Director of Communications,
(703) 528-0669 or kate@nascus.org
The
NASCUS mission is to enhance state credit union
supervision and advocate a safe and sound state
credit union system. Founded in 1965, NASCUS
represents all 48 state and territorial credit
union supervisors and the NASCUS Credit Union
Advisory Council, which is made up of nearly
500 of the nation's more than 3,400 state-chartered
credit unions.
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