For the last two years, NFCCU, with 83,000 members, has been offering "ADVANCpay,"a two-week, $500 loan with a one-time $40 application fee. The product, said Beal, has been profitable in producing 2005 fee income of $100,000.

NFCCU's largest Las Vegas competitor, the $850 million Silver State Schools Credit Union said it is planning to roll out an alternative loan product in the first quarter of next year with parameters to be determined, said Gilbert Niima, executive vice president.

Silver State, with its educational field of membership, does not have as serious a problem as Nevada Federal, with its community charter, in retaining a high percentage of its members patronizing payday shops, said Niima. Nevada Federal said a large proportion of its members have credit scores below 650, a condition not pervasive at Silver State.

"Because many of our members are teachers with higher education levels, we do not have the same problem," said Niima.

Meanwhile, the $560 million Clark County Credit Union, also of Las Vegas, said it does seek to provide counseling for members caught in payday traps, but it has been reluctant to "get on the bandwagon" preferring to stick to the so-called "courtesy pay" services where members are charged the $30 NSF with checks covered until payday. "We simply don't see how some of these payday alternatives really help the member get out of the cycle," said Mark Andrews, vice president of sales and marketing. In financial lingo, the courtesy pay phenomenon, noted Andrews, has come to be known as "pink Thursday" since payroll checks get issued on Friday with member checks often covered in direct deposit. In confronting the Nevada problem, Paulson, the league's newly elected chairman, identified several payday models across the U.S. as being studied by the industry. These include one offered by State Employees' Credit Union of Raleigh, N.C. and another savings-linked product promoted by Hank Klein, the retired president/CEO of Arkansas Federal Credit Union in Little Rock. Banks See CRA Potential

Klein remains one of the industry's leading advocates for payday products and agreed with Nevada CU executives that CUs are often reluctant to enter the field because of feared losses while banks, which he now counsels, are often motivated to get into payday "to get Fed credit on CRA compliance."

"I know of one bank in Chicago that agreed to fund payday loans for a credit union just to get the CRA credit from regulators," said Klein, who is the founder and president of Little Rock-based Arkansans Against Abusive Payday Lending. The bank was not identified, but it was understood North Side Community Federal Credit Union was the lender though officials of the Chicago CU were not immediately available for comment. Klein, who retired from Arkansas' largest CU more than a year ago, has long promoted "PAL", an alternative product with a savings component calling it "the best thing on the market." Klein adds, however, "I have nothing to sell," noting he works now more closely with banks than CUs. Nonetheless, Klein said he still gets invited to CU meetings, speaking recently at a Defense Credit Union Council conference with another trade meeting slated in north Florida in January. He said the latest CU to sign up for PAL is University of Iowa Community Credit Union of Iowa City. UICCU, which is slated to change its name to Optiva Credit Union next March, said it began promoting the product on a limited basis in August "as one way to help meet the payday problem in our state."

The Arkansas CEO said he was heartened to hear about the interest in PAL in Nevada though he was not aware of all of the CU efforts in that state.

He also said he remains concerned for CU members who get stuck "in courtesy pay jail" which is why he is devoted to aiding CUs in helping their members find relief. –[email protected]