The CFPB's proposed payday lending rule includes an exemption for loans modeled after the NCUA's Payday Alternative Loans program, but officials warned that wouldn't make the rule a panacea for credit unions.
The CFPB released the document, which totaled more than 1,300 pages, on June 2, and conducted a field hearing on the proposal in Kansas City, Mo. The agency is seeking comment on the proposal by Sept. 14.
Credit unions have been pressing for an exemption from the rules, which are designed to rein in payday lending that the CFPB considers predatory. The agency defined a payday loan as a short-term loan that is typically due on the borrower's next payday. Borrowers usually must give lenders access to a checking account or write a post-dated check for the full balance. The loans' may cost between $10 and $30 for every $100 borrowed, and sometimes carry an APR of almost 400%.
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