WASHINGTON — Federal Reserve Chairman Ben S. Bernanke today praised credit unions for their products that are alternative to payday loans.
"I think banks and credit unions–I give particular credit to credit unions–have done some particularly good work in terms of providing remittance services that allow people to get money back to their families without exorbitant costs," he said in response to a question from Sen. Daniel Akaka (D-Hawaii) at today's hearing of the Senate Banking Committee.
Akaka, a strong supporter of credit unions, said as a result of an NCUA grant the Community Federal Credit Union in Kailua has developed an affordable alternative to payday loans, which are popular with members of the U.S. Marines and other members. He then asked Bernanke what can done to protect consumers from payday loans, especially during difficult economic times, such as the nation is now experiencing.
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