According to this article, payday loans (a viable credit option that’s being used by millions of working Americans in 19 million households) “‘stink up’ the lending landscape”. And what option are they promoting? None other than the credit unions’ alternative. Like we said before:

Last September, the NCUA voted to allow credit union members to raise the annual interest rate for short-term loans to 28 percent. What the NCUA doesn’t discuss is that the fees credit unions tack on to a loan, drive the true cost up to, yes, triple-digits. For example, a two-week (typical payday loan) $400 loan at Kinecta Federal Credit Union costs $42.25, that’s an annual percentage rate (APR) of 275 percent. Or when considering a two-week loan at Mountain America Federal Credit Union, this short-term alternative has an APR at 876 percent.

Like it or not, short-term, unsecured credit is expensive and no one, including banks and credit unions can afford to make loans at the rates of traditional, secured loans. Is the cost worth it to consumers? We think that payday lenders, banks, and credit unions should clearly disclose loan fees and terms and at the end of the day, only the consumer can decide whether the loan is appropriate for their needs.”

Our Board Chair D. Lynn DeVault goes on to say:

“Like it or not, short-term, unsecured credit is expensive and no one, including banks and credit unions can afford to make loans at the rates of traditional, secured loans. Is the cost worth it to consumers? We think that payday lenders, banks, and credit unions should clearly disclose loan fees and terms and at the end of the day, only the consumer can decide whether the loan is appropriate for their needs.”