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Comments on NCUA small loan plan due July 6
WASHINGTON (5/6/10)—Comments on the National Credit Union Administration’s (NCUA) proposal that would permit credit unions to charge higher interest rates on short-term, small dollar loans must be submitted to the Agency by July 6. The NCUA proposal, which was published for public comment in the Federal Register on Wednesday, would cap the interest rates and amounts for these types of loans at 10% above the NCUA's loan ceiling and $1,000, respectively. The NCUA has also stated that credit union members would only be permitted to take out one loan at a time, and that the maximum lifespan of that loan would be six months. The loans, which are consistent with the Federal Credit Union Act, would not roll over. However, late fees and default fees would be permitted. At last month’s NCUA board meeting, Chairman Debbie Matz asked that comments on the proposal focus on safety and soundness concerns. Matz also asked for credit unions that currently offer these types of loans to provide input on whatever difficulties they may have had. The Credit Union National Association’s (CUNA) federal credit union subcommittee will be reviewing the full NCUA proposal and will, along with the CUNA Lending Council, develop a response to the NCUA. For the NCUA proposal, as published in the Federal Register, use the resource link.
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