NCUA board will vote on Payday Alternative Loan final rule

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NCUA has released its agenda for the agency’s upcoming board meeting. The meeting is scheduled for Thursday, Sept. 19, at 10 a.m.

During the meeting, the board will vote on its long-awaited Payday Alternative Loan final rule.

Since 2010, NCUA has encouraged federal credit unions to offer non-predatory, short-term loans. Federal credit unions offering PALs are authorized to exceed the federal interest rate cap by ten percentage points. NCUA’s current proposal authorizes credit unions to offer an additional type of short-term loan, referred to as PAL II.

In a letter to NCUA last year, New York Credit Union Association President/CEO William J. Mellin said New York’s credit unions were generally in favor of the agency’s proposal to provide credit unions with greater flexibility in offering Payday Alternative Loans.

In particular, he commended the agency for its proposed plan to nix the requirement that consumers be members of the credit union for at least a month before being eligible to receive a PAL.

“The overriding goal of any regulatory framework governing short-term loans should be to give consumers as many alternatives to taking out payday loans as possible,” he wrote. “Consequently, it never has made sense for NCUA to mandate that PALs should only be made available to persons who are credit union members for at least a month.”

The following agenda items are also slated for NCUA’s upcoming board meeting:

  • Share Insurance Fund Quarterly Report;
  • Final Rule, Part 715, Supervisory Committee Audits; and
  • Final Rule, Part 701, Appendix A, Federal Credit Union Bylaws;

The open meeting will be streamed live on NCUA’s website. Results from the meeting will be reported in The New York Minute.

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