Payday Loan Articles: Credit Unions Making Waves in Cash Payday Loans Industry

Payday Loan Articles Articles about instant payday loans and cash advances

Credit Unions Making Waves in Cash Payday Loans Industry Jun 6th 2011, 20:17 Credit unions, traditionally known as the place to go for car, home and education loans are increasingly getting into the small, high-price short-term loan business. So, we learn from this article that "more than 500 federally insured credit unions are making payday loans in an industry struggling to remake itself after the financial crisis of 2008-2009." Likely many of these credit unions have begun the practice of offering cash payday loans since last September, when the National Credit Union Administration raised the annual interest rate limit from 18 percent to 28 percent for credit unions that are offering cash payday loans. Is this remake of the credit union industry into something offering cash payday loans something to be welcomed or feared? Well, for me, a person who supports competition and free markets, the more sorts of businesses offering cash payday loans, the better. First of all, this competition in the industry of cash payday loans will do what competition always does, improve the lot of the consumers. As more businesses offer cash payday loans, they will need to do what they can to entice customers. The way they will do this is by lowering their fees. Perhaps, this competition will lead to varying tiers of cash payday loans. photo credit: kenteegardin People with truly terrible credit could possibly be charged higher fees, while those folks who have a history of paying bills and loans on time as agreed, will be able to get cash payday loans with lower fees. This type of system would be great, because not everyone deserves to be charged the same for credit and those who improve their handling of credit will be encouraged to do so by the lowering of the fees they are charged over time, from loan to loan. In agreement with my view on cash payday loans is NCUA Chairman Debbie Matz, who said about this change in her industry, "We spent a long time trying to do this in a way that would work for members and for the credit unions and not be predatory." So, I am all for credit unions offering cash payday loans and all for consumers of cash payday loans having more credit options. Original Article: Credit unions increasingly offer high-rate payday loans

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