The National Consumer Law Center continued its criticism of payday lending CUSOs in a NCUA comment letter regarding the agency’s proposal to amend the CUSO rule.
“We are particularly concerned about a very small number of CUSOs (and credit unions) that are engaged in payday lending or activities supporting payday lending,” the NCLC wrote in its Sept. 26 letter that was recently posted on the NCUA’s site.
The NCLC said it wants to see an end to federal and state credit unions from investing in, taking finder’s fees from, or otherwise engaging with CUSOs that are involved with payday lending.
Since the center ran a report last year denouncing payday loans, it said the number of credit unions that offered them dropped from 58 to 24.
“This form of irresponsible lending creates a variety of compliance, safety and soundness and reputation risks for both the entity that makes the loans and any other entities associated with them,” the NCLC wrote.
The center said it provides legal expertise on consumer law issues to attorneys, policy makers and consumer advocates. Meanwhile, Credit Union Times was told NCUA Staff Attorney Christie Loizos recently spoke at NACUSO’s Business Services Connection in San Diego telling attendees the regulator had received more than 250 comment letters on its proposal to amend the CUSO rule. Loizos said because of the large amount of feedback to read through, a decision will not come until after the first of the year.