"But we have also emphasized that the market for such credit products must be marked by responsible lending that helps rather than harms consumers," he added. "Extending credit to people in a way that sets them up to fail and ensnares considerable numbers of them in extended debt traps is simply not responsible lending."

NAFCU Director of Regulatory Affairs Alicia Nealon expressed some surprise that credit unions had not reacted more to the agency's guidelines, given that payday loan alternative products have taken up a lot of credit unions' time and attention over the years.

"I think the payday loan regulation may be the most anticipated thing that the CFPB will do," Nealon said, noting that Congress cited regulating the highly expensive short-term loans in the Dodd-Frank Act as a reason it should create the CFPB.

She attributed the relative lack of credit union reaction to several possible factors, including misunderstanding the process and what the CFPB did when it released the guidelines.

Nealon explained that under the agency's process, the CFPB releases guidelines that lay out the approaches it is taking toward a given regulation, then shares them with a committee of small businesses that offer feedback. Once the agency collects the information, she said, it moves forward with a proposed regulation and taking comments that other agencies use as well.

Nealon added that even though the CFPB meant to take this approach from the beginning, the priority demanded by mortgage regulations pushed the CFPB's preferred regulatory process – something credit unions are more familiar with – to the back burner.

However, she also expected credit unions to catch up, and said there would almost certainly be credit unions on the small business committee that will write the first comments about the agency's ideas.

She also predicted credit unions may not have many comments in this early stage of the regulation since the guidelines appear to tweak the approach NCUA used in its Payday Alternative Loan program, which many federally chartered credit unions are already familiar with.

CUNA declined to discuss its approach to the issue, citing an ongoing effort to consult with its member credit unions.

The agency limited PAL loans to no more than 28%, required them to have a minimum repayment period of at least one month, banned the loans from being rolled over and limited them to one loan per member at a time with no more than three loans in six months.

The CFPB guidelines for short-term loans would require lenders to underwrite the borrower's ability to repay the loan and leave a minimum of 60 days between each loan without further underwriting. Alternatively, if they do not underwrite, they would have to limit the number of times consumers took out the loans over the course of a year and how many times they could roll the loans over.

Chairwoman of the National Federation of Consumer Development Credit Unions, Deyanira Del Rio said the National Federation generally applauded the agency's guidelines, but that they also wanted the CFPB to draft a strong regulation that cracks down on abusive payday lending.

"What we really back as right for our members and right for our communities is a strong regulation that mandates responsible small-dollar lending," Del Rio said, adding that such lending underwrites the loans to make sure borrowers will be able to repay them and carry terms that allow them to do so.

"Right now, we don't think the guidelines are strong enough," Del Rio, who also serves as Chairwoman of the $45 million Lower East Side People's Federal Credit Union, said, criticizing the approach that would allow payday lenders not to underwrite their loans.

Del Rio, who in addition serves as Co-Chair of the New York City-based New Economy Project, a non-profit financial services advocacy organization, pointed out that New York State banned both online and storefront payday lending, and that the economy did not collapse and there has not been a consumer revolution to bring the loans back.

Instead, she said, consumers are doing the sorts of things they would have done before to meet a short-term cash need if payday lenders had not been pushing their allegedly inexpensive and easy-to-obtain loans.