COMMENTS of

NATIONAL CONSUMER LAW CENTER (on behalf of its low-income clients)

and

CONSUMERS UNION

on the

National Credit Union Administration’s Proposed Rule on

Short-Term, Small Amount Loans

12 CFR Part 701

75 Fed. Reg. 24497 (2010)

July 6, 2010 

With respect to the proposal, we support a higher 28% interest rate cap for small dollar loans but with the following changes to the proposed rule: 

• Only one $20 application fee should be permitted per year, or at most every six months.


• No other fees, including late or other penalty fees, should be permitted.


• The minimum term should be 90 days, or one month per $100 borrowed for loans under $300.


• Loans at the 28% rate must be repaid in multiple, fully amortizing installment payments.


• Loans at the 28% rate should not be secured by mandatory electronic repayment or other electronic security, nor require payroll deduction. A direct deposit requirement, without mandated electronic repayment, is acceptable.

Download the document: http://www.defendyourdollars.org/pdf/NCUA-proposed-rule.pdf