ARLINGTON, Va.–In follow up to the NCUA board’s approval of a new Payday Alternative Loan (PALs) II program, NAFCU’s Carrie Hunt said she isn’t surprised by the pushback from some consumer groups critical of the new rules.
As CUToday.info reported, several consumer groups were critical of the new program, saying it approves loans to be offered by credit unions that aren’t priced much differently than those of payday lenders.
Hunt, EVP and general counsel with NAFCU, said the PALs II offering is still better than what many payday lenders offer, and that it remains “very difficult” to offer small-dollar loan programs that at least break even. The latter is why so many credit unions have been “hesitant” to offer such programs, said Hunt.
PALs II allows for larger loan amounts.
Hunt said she expects NCUA will continue to look at tweaking its PALs program regulations.
“I think it was very telling when Board Member (J. Mark) McWatters said this is a process. We will have to see how things go.”
Hunt added the fact credit unions have sought input from organizations such as the Pew Trusts shows CUs remain interested in providing “provident credit” and getting consumers into more stable financial relationships.