Consumer Groups Want the NCUA to Crack Down on Payday Lending
The National Consumer Law Center and Consumers Union have urged the NCUA to crack down on what they charge are overly expensive credit union branded payday loan products.
Their comments came in a July 6 letter to the agency about its proposed regulation on short term, low dollar loans and referenced a recent NCLC report which charged "many federal and state credit unions are offering short-term loans with true rates above 18%, up to 400% or even higher."
"The NCUA has a variety of legal tools to address these evasions, including authority under the Truth in Lending Act, Federal Credit Union Act, Federal Trade Commission Act, and its safety and soundness responsibilities stemming from the NCUA's role as an insurer of federal and state credit unions," the organizations wrote. "Credit unions that are not offering affordable small dollar loans today will have little reason to do so under the proposed rules if they can charge more under existing rules."