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Payday loan alternatives corporate CU requirements on NCUA agenda
ALEXANDRIA, Va. (4/23/10)--The National Credit Union Administration (NCUA), at its upcoming board meeting at 10 a.m. (ET) next Thursday, is expected to discuss short-term, small dollar, so- called payday loans and waivers under certain provisions of its corporate credit union regulation. Posting its agenda yesterday, the NCUA had the following three items slated:
* Proposed Rule – Section 701.21(c) of NCUA’s Rules and Regulations, Short-term, Small-dollar Loans; * Waiver under Part 704 of NCUA’s Rules and Regulations; and * Insurance Fund Report.
Section 701.21 of the NCUA’s rules address loans made by federal credit unions, and Part 704 regulates corporate credit unions. The Credit Union National Association is aware that some at NCUA have been looking for ways to help credit unions offer alternatives to payday lending. One of the challenges facing federal credit unions is an 18% interest cap on payday loan programs. Under Section 704, some corporate credit union services are tied to the capital of the corporate. The NCUA late last year proposed substantial revisions to its corporate credit union regulations. The NCUA has collected public comments on these regulations, and plans to complete its work on the corporate credit union system later this year. The board will also be updated on the status of the National Credit Union Share Insurance Fund during the meeting. A closed meeting of the board--during which the NCUA will discuss supervisory activities and personnel matters--will follow the session. The NCUA on Thursday also announced a separate closed meeting, scheduled for later today, which will cover NCUA supervisory activities.


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