Two credit unions cited in a letter to the NCUA this weekcomplaining about payday lending emphasized that they merelyparticipate in a CUSO offering the loans and do not offer themthemselves.

In addition, the credit unions argue the loans offered throughthe CUSO XtraCash are thebest way they have of helping members avoid other short term loanswith even worse terms.

Meanwhile, the NCUA said it would be looking into the issuesraised in a letter it received Thursday from the National ConsumerLaw Center and Center for Responsible Lending.

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“We offer the XtraCash product to our membership as analternative to the payday lenders,” wrote John Neusaenger, CEO ofthe 22,000-member, $181 million Orlando FCU in an email statementabout the lending.

“Those loans are not written nor funded by the credit union, noris the significant risk of loss taken on by the credit union,”Neusaenger said.

Charlton Knowles, CEO of the 8,900-member, $75 million BuckeyeCommunity FCU in Perry, Fla., made similar points.

Communicating through the credit union's vice president, PamRigoni-Parker, Knowles said the credit union does not fund theloans, does not control their interest and does not make incomefrom their interest.

“Buckeye Community FCU does not fund these loans. They are notloans of the credit union,” Rigoni-Parker wrote on behalf ofKnowles, who was in CPA training on Friday.

“BCFCU does not receive any interest from these loans, so sayingwe are charging high interest rates is incorrect. Again – wecollect no interest from these loans,” Rigoni-Parker wrote.

The credit union collects a small administrative fee for theloans and Buckeye Community FUC has its members' interests asmotivation.

“Our purpose for offering access to these loans is to help ourmembers,” Knowles said. “We have had members over the years whocould not afford their normal monthly payments because they gotcaught up in only being able to make it from payday loan to paydayloan,” he added.

Meanwhile, NCUA Board Chairman Debbie Matz pointed out in astatement that the credit union which make these loans throughCUSOs remain effectively beyond the reach of the agency'sjurisdiction.

“”In 2011, NCUA created an Office of Consumer Protection focusedon enforcing consumer laws and regulations that apply to federalcredit unions,” Matz said in response to the NCLC letter.

“Of the nine institutions NCLC identified in its report of May2013, six are making short-term loans through third-party vendorsover which we have no statutory enforcement authority.

I am very troubled that these vendors are making high-pricedloans using the names of credit unions,” Matz said. “In the threeinstances where federal credit unions are charging high fees forshort-term loans, we will review each case and use every tool atour disposal to resolve the situation.”