HONOLULU — Department of Defense Deputy Undersecretary for Military Community & Family Policy Leslye Arsht said the department views credit unions as partners against payday and other fringe lenders.

"The department was faced with a unique opportunity to regulate the financial services industry, not really our core competency," she admitted. However, through consultation with the financial services regulators the department feels a balance has been struck though a final rule will not be published until Sept. 1. NAFCU Associate Director of Regulatory Affairs Pamela Yu commended the department for its efforts to listen to the concerns of the financial services industry.

Credit unions and banks were not exempted, which some had lobbied for. However, for balance in the regulation, Arsht explained, "We chose to define the creditor broadly and the covered consumers narrowly."

However, Arsht added, "We will consider changes to the regulation when it is warranted and practical." The department continues to monitor to see if the targeted lenders change their practices to evade the new law and regulation.

She noted that in the DoD report to Congress, of the 24 'best practices' provided, 19 came from credit unions. "We regard you all as partners in helping protect out service members and families," Arsht told participants in NAFCU's Annual Conference.

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