Metsger to CFPB: Exempt Payday Alternative Loans in Proposed Rule

National Credit Union Administration Board Chairman Rick Metsger wrote in a letter to the Consumer Financial Protection Bureau that NCUA’s payday alternative loan rules protect consumers, and asked the CFPB to fully exempt these loans from its final payday lending rule

In the letter, Metsger wrote that payday alternative loans offered by federal credit unions are “a safe, more affordable product” than typical payday loans, which can saddle consumers with unmanageable debt.

“We respectfully request the Bureau exempt FCUs completely from its final rule for loans made under and consistent with NCUA’s PALs regulation,” Metsger said in his letter. “As the prudential regulator for federal credit unions, NCUA already ensures that members receive the type of protections the Bureau is seeking to address. The Bureau should therefore defer to determinations of the FCU prudential regulator about this product.

“The National Credit Union Administration fully supports the goals of the proposed rule,” Metsger said. “NCUA continues to review its existing regulations and may consider enhancements to the PALs regulation. Additional rules from sister agencies will unnecessarily increase compliance burdens.”

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Questions about this story? Contact Eric Horvath: 503.350.2222, ehorvath@nwcua.org.

Posted in Advocacy News, Federal, NCUA, NWCUA.