PHOENIX — It may have raised a few eyebrows at a bankers' convention, but there was FDIC Chairman Sheila Bair singling out State Employees' Credit Union of Raleigh, N.C. in telling bankers just how to manage a successful payday loan product.
Though the banking regulator did not specifically cite "Salary Advance Loans" in her formal remarks to the American Bankers Association annual convention here, she mentioned the product three times in briefing reporters about the need for the banking industry to "do a better job" on payday alternatives.
Bair told journalists the CU's $500 maximum "Salary Advance Loan," which has a special 5% savings requirement, was a good "model" for banks to follow in developing payday alternatives suggesting also they might offer the product at higher rates than CUs and still be profitable.
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