A recent NCUA letter to federal credit unions drew some lines to govern the characteristics of payday loan alternatives federal credit unions can offer.
"An FCU's program should be designed ultimately to try to help members end their reliance on payday loans and guide members toward the FCU's more mainstream, low-cost financial products and services, including financial counseling," the NCUA wrote before explaining how some FCU payday loan programs did not meet that standard.
For example, the agency said a permitted program might offer a loan of $500 for 120 days at 16.9% APR and no fees. Minimum payments are due each payday and if a member has received two loans they must receive a budget counseling course before taking out the third.
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