Credit Union Times' recent report about a letter sent by NCUA Board Chairman Debbie Matz to the National Consumer Law Center and the Center for Responsible Lending led me to question the agency's priorities. I continue to be puzzled by why the NCUA, and especially Matz, expends so much energy on a credit union business practice that isn't even a blip on the credit union lending radar screen. Although it was certainly appropriate for the NCUA chairman to respond to these strident consumer activist organizations' complaints, combating payday lending, contrary to what the chairman implies, is not mandated by the Federal Credit Union Act and has very little to do with safety and soundness.

When one looks at the bigger picture, the NCUA's short-term small amount loan program has accomplished diddly-squat. Any suggestion that credit union payday loan alternative lending can replace the conventional store-front retail or Internet payday loan industries is at best disingenuous and at worst blatant political pandering. Although each credit union member who got a cheaper short-term loan from a credit union was helped, the math suggests that just not that many consumers out of the nearly 52 million total members of federally chartered credit unions have benefited. When compared to the entire multibillion dollar payday loan industry, the credit union involvement is not even a drop in the bucket.

Payday lending accounts for less than one-one hundredth of one percent of federally charter credit unions' loan portfolios. I wonder how the chairman calculated the numbers that gave her the confidence to state that the program “has saved consumers millions of dollars.” How was that savings measured and how detailed was the data?