We urge NCUA to make no changes to the payday alternative loan (PAL) program that would increase the likelihood that credit union members end up in cycles of high-cost, short-term loans that resemble payday loan debt. Most critically, we strongly oppose permitting more than six application fees in twelve months as proposed for PAL II. We also oppose permitting 28% interest on loans as large as $2,000, dropping the minimum loan size, and proposing a PAL III program that would permit even more expensive or larger loans or weaker underwriting. Finally, we urge NCUA to address abusive overdraft fee programs, which lessen the incentive for credit unions to offer more affordable small loan products.
August 6, 2018
Payday and Other Small Dollar Loans
Letters to Congress