LAS VEGAS - The court and regulatory skirmishing over payday loans - as well as their legitimacy - became a prime topic for attendees at a pre-opening day session of NAFCU's Annual Conference and Exhibition convening here last week. Providing a litany of the most recent legal actions by states and bank regulatory agencies to clamp down on payday practices was Hank Klein, a recently retired Little Rock CU executive who for years has sought to expose the payday problem and in his remarks here cited the aggressive "tactics" of payday firms to circumvent state and federal statutes by rent-a-bank schemes. Those schemes, said Klein, the recently retired CEO of Arkansas FCU, have now come into disfavor as a result of a July 1 ruling by the FDIC setting stiffer capital terms for banks hooking up with payday outfits. "There are only 11 banks now," he said, that are listed as having linkups but he warned that the payday outfits are now trying out alternatives like "rent-a-finance" firms or piggybacking on out-of-state peers that still retain bank ties. Coming to the defense of payday firms in a session at the Defense Credit Union Summit-part of the NAFCU program-was Dennis Bassford, president of Moneytree Inc., a Seattle payday operation with outlets in six Northwest states who maintained that "in a heartbeat" Moneytree would seek to put out of business law-breaking deadbeat firms. However, he said there are scores of payday firms like his which clearly operate fairly and legitimately under state law to provide a real service demanded by the public and that those harsh industry critics-without naming CUs - need to stop griping. He said the charges of "loan sharking" and "predatory lending" against legitimate firms are unfair and uncalled for. He compared overdraft protection products offered by CUs and banks to rates on payday offerings arguing that OD products also contain an equal risk of pushing consumers into debt. At the NAFCU session, the defense CU executives heard directly from U.S. Rep. Sam Graves, (R-Mo.) author of a tough anti-payday bill placing a 36% cap on payday loans. Graves said he is gaining bipartisan House support for his bill and was expecting an endorsement last week from the Military Coalition, a group of defense lobbying organizations. Graves spoke by an audio hook-up. Graves urged NAFCU attendees to write their Congressmen in support of his bill which he said is gaining new sponsors. From the floor, Klein of Arkansas asked if his local Congressman was in the group but Graves said he did not know. In his remarks, Klein also framed the payday issue for CUs as one which compares to "sex education." The issue there he said is whether CUs should engage in "abstinence" - not offering the products at all - or some form of "contraception" by providing the service but with protective caveats. [email protected]