CUs may not qualify as financial counselors under bankruptcy reform legislation, says CUNA

WASHINGTON – Credit unions may not qualify as independent financial counselors for mandatory credit counseling under bankruptcy reform said CUNA in a letter to the Office for U.S. Trustees. Pending bankruptcy reform legislation would require credit counseling of debtors before filing for bankruptcy. Because of their vested interest in seeing CU loans reaffirmed by members filing for bankruptcy, credit unions may not quality as independent financial counselors, wrote Kathy Thompson, CUNA’s SVP for Compliance and Legislative Analysis, in a letter to the Office for U.S. Trustees. Credit unions could however play a role in overall personal financial management, wrote Thompson. “I do envision that some credit unions may help provide the instructional course concerning personal financial management. …”CUNA statistics indicate about 30% of the nation’s 10,000 credit unions provide remedial financial counseling, with at least half of those with more than $50 million in assets doing so.”