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NAFCU Regulatory Affairs Counsel Kavitha Subramanian on Monday cautioned CFPB against issuing regulations just yet for the student loan servicing market and advised the bureau to consider the unique business model of credit unions as member-owned cooperatives in any potential rulemaking.

In a comment letter responding to CFPB's request for information on student loan servicing (released in conjunction with a public hearing it held on May 14 on the matter), Subramanian noted NAFCU's concerns regarding the prospect of new rulemaking. "NAFCU and our members believe that additional regulations in this area are premature and could have the unintended consequence of reducing access to credit for student borrowers," Subramanian wrote.

Subramanian reiterated the association's belief that students should have access to transparent information about a variety of safe and vital financial services, including loans to pay for their education. She said regulating the market too soon "may negatively harm the ability of well-regulated credit unions to serve this important student demographic."

"NAFCU cautions the CFPB against proposing any drastic regulations in this market that could have the unintended consequence of increasing the regulatory burden for credit unions and thereby reducing student borrowers' access to lower-cost credit from safe and reliable credit unions," Subramanian said in the letter.

NAFCU continues to monitor this issue for any developments.