NEW YORK (8/4/09)--The Credit Union National Association (CUNA) is providing resources so leagues and credit unions can answer questions that may be prompted by a front-page article in Monday's USA TODAY that was critical of some credit unions' payday loan alternatives. The article cited the loans of a single credit union in Nevada. The article alleged that some payday loan alternatives at credit unions are "not a good deal." The article quotes an attorney for the National Consumer Law Center (NCLC), who said many credit union payday loan alternatives really help consumers but others are only marginally cheaper than traditional payday loans. The story was sparked by an NCLC statement about the National Credit Union Administration's letter of guidance to credit unions on payday lending (see News Now July 30). Lois Kitsch, national program director for REAL Solutions, a program of the National Credit Union Foundation (NCUF), was interviewed for the article and countered the negative claim. Many credit unions offering the alternative loans encourage savings and allow up to 90 days to repay the loan, instead of the traditional 14-30 days, she told the newspaper. She also was interviewed Monday morning on CBS about the programs, according to NCUF. CUNA, in providing statistics, background papers and talking points for the leagues, noted that between 10% and 20% of credit union members opt to do at least some business with a payday lender, for a variety of reasons. "Consumers clearly show a need for short-term cash loans they can access quickly. Credit unions are offering reasonable and more consumer-friendly alternatives to the typical payday loan," said Dan Mica, CUNA president/CEO. He noted credit unions are a logical choice--they have a history of providing small loans to help their employer-based memberships get by until payday. "Credit union alternative payday loans are designed to help members break their payday loan habit by helping them pay off the loan," Mica said. No two short-term loans are alike at credit unions because they are customized to fit their membership's needs, which vary from credit union to credit union, he added. Of the credit unions offering payday loan alternatives, roughly 60% use open-end credit terms, while closed-end terms extend to 30, 60, or even 90 days, according to CUNA's statistics. More than nine out of 10 credit unions offering the loans require them to be paid in full before the member is provided another advance. NCUF told News Now that when the article's author contacted the organization Friday, it did not have the opportunity to provide significant background information or links to other credit unions' payday loan alternatives. On Monday, NCUF provided additional information to the writer about credit union payday lending alternatives for a future article. A few state leagues noted the newspaper article in their daily newsletters. "The story unfortunately did not do a good job in capturing all the great work credit unions do to make affordable short-term loans available. It sourced only one credit union," said New Jersey Credit Union League President/CEO Paul Gentile (The Daily Exchange Aug. 3). "The issue of whether a fee should be viewed as APY (annual percentage yield) has been debated for years with overdraft programs and short-term loans. The fact is many credit unions are making short-term loans that others won't and they are doing them to help their members through tough times." He pointed out that the article "does not provide an example of a credit union using a true payday loan alternative." Readers clogged up the newspaper's comment blog with a variety of opinions on the article. Many were favorable to credit unions. While no one professed to like their bank's products, several said they preferred their credit unions. "I've been with credit unions for almost 30 years. A bank will NEVER get my business," said one commenter.