The NCUA Doubles Amount Credit Unions Can Provide for Payday Alternative Loans

Regulatory, conformity, and litigation developments within the financial solutions industry

Home NCUA The NCUA Doubles Amount Credit Unions can provide for Payday Alternative Loans

The National Credit Union Administration (NCUA) voted 2-1 to approve the final rule related to expanding payday alternative loan options (PAL II) at the September open meeting. Even though the NCUA made clear within the rule that is final the PAL II will not change the PAL we, the flexibleness associated with PAL II will generate brand brand brand new possibilities for borrowers to refinance their pay day loans or other debt burden beneath the PAL II financing model. Significantly, though, credit unions might only provide one kind of PAL to a debtor at any time.

The key differences when considering PAL we and PAL II are the following:

Loan Type PAL We PAL II
Loan Amount

$1,000 Optimum

$2,000 Optimum
Loan Term

1 Minimum month;

6 Maximum month

1 Month Minimal;

12 Month optimum
Membership Requirement needs to be an associate of Credit Union for four weeks before acquiring loan No account time requirement Overdraft or Non-sufficient Funds (NSF) Fees No Restrictions Cannot cost overdraft or NSF costs

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