Matz touts NCUA small-loan rule in HuffPost
Jan. 7, 2014 – NCUA Chairman Debbie Matz, noting recent new restrictions set by bank regulators on payday products, promoted her agency’s regulation on short-term, small-amount loans Monday in The Huffington Post.
Matz takes aim at television ads touting payday loan businesses as a lifeline to those too financially strapped to deal with unexpected expenses. She notes that most payday loans recipients – about 70 percent of them – use such loans to cover recurring expenses such as rent, utilities, or food. And, she notes, seniors and members of the military are frequent targets of payday loan providers.
She points out that not all payday lending is predatory in nature. But it can be costly, and federal bank regulators – FDIC and the Office of the Comptroller of the Currency – have just recently issued rules that restrict how banks may offer such loans.
Those rules from FDIC and OCC drew an outcry from regulated banks, but Matz, in her blog post, says NCUA has written its own rule that “allows and encourages credit unions to create the right type of short-term small loans.”
NAFCU commented on the agency’s proposed rule when it was first issued. It continues to encourage the agency to provide credit unions as much flexibility as possible in providing their members viable, less-costly loans than they could get elsewhere.
Matz in The Huffington Post