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Nevada Federal is Out Of Payday Loan Business 
10/21/2009 

The $804 million Nevada Federal Credit Union, headquartered in Los Vegas, has apparently written its last payday loan.

 

A call to the credit union confirmed that the Nevada stopped offering the loans as of Thursday, Oct. 15 and any mention of the controversial short term loans had disappeared from its Web site.

 

Nevada Federal had been offering a loan called AdvancePay, which charged an application fee up front whether a borrower got the loan or not.  The credit union had defended the loans by arguing they were less expensive for members than other payday advance loans offered by other firms, but an NCUA letter to credit unions made it clear the regulator took a dim view of the lending.

 

In an article that appeared Sept. 18 in In Business Las Vegas, a local business journal, Nevada CEO Brad Beal is quoted as saying the credit union had written 12,000 loans through July of this year, worth roughly $8 million and had taken $75,000 in defaults on them.

 

The credit union has not commented on why is stopped offering the loans.

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    • 10/22/2009 4:13:00 PM
    • PaydayLendingRep
    • Regretful Shutdown
    • Eliminating payday loans as an option does not eliminate the need for short-term credit. Instead it forces consumers to choose between more expensive alternatives such as fees for bounced checks, overdraft protection, or late bill payments or even unregulated off-shore Internet lenders. A survey by the University of North Carolina Center for Community Capital found that, when payday loans were no longer an option, consumers most frequently "did not pay/paid late" [an expense] when faced with a financial crisis. Other frequently cited strategies were "bounced checks/used overdrafts" or "used credit card/cash advance." Some admitted to having utilities disconnected, going without a prescription medication or ending up with a damaged credit rating. In each case, consumers may have been better served by payday advances, which often offer lower fees and do not negatively impact credit ratings.
    • 10/22/2009 4:44:28 PM
    • AME
    • Payday loans
    • Charging a fee even if one does not get a loan is crazy especially if it is a small loan. They probably are stopping because of they couldn't make the same amount of money that they did on the more traditional loans. It's my understanding that payday lenders only charge a fee for the loan but no application fees or membership fees. This is what makes them a cheaper option.
    • 10/29/2009 4:44:37 PM
    • Lucy
    • Advance Pay
    • You conveniently left out how helpful this has been to so many members/customers. I personally miss this product! Our market out here is robbing us with Payday loans, this was nothing like a payday loan!!

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