Credit union employees wanting details on the NCUA's new rules on short-term payday loan alternatives can consult the regulatory alert issued by the agency.
In September, the NCUA board unanimously approved new regulations on payday loan alternatives. Federal credit unions will be allowed to charge up to 28% for certain short-term loans. The loans can be between $200 and $1,000 and can have terms of between one and six months. The application fee can be no more than $20, and the borrower must have been a member of the credit union for at least 30 days.
The alert said it allowed a higher rate because it believes that CUs would not be able to cost-effectively operate a short-term small loan program with the 18% rate ceiling.
