Should federally-insured credit unions push payday loans with triple-digit interest rates? CRL and the National Consumer Law Center (NCLC) say no, urging the National Credit Union Administration (NCUA) to stop its members from making these types of predatory loans.
Most credit unions conduct responsible lending that does not include payday-type loans. However, NCLC has identified nine federal credit unions that offer short-term loans with triple-digit rates. These credit unions either make the loans directly or have an arrangement with a third party that uses the credit union's name and makes the loans. Federal credit unions are prohibited from charging more than 18% APR for 14-day loans.