Credit Unions Allowed to Offer Bigger Payday Alternative Loans

Credit unions will be allowed to offer larger payday alternative loans with terms up to one year after federal regulators updated their rules.

The National Credit Union Administration on Sept. 19 finalized a new rule that allows payday alternative loans of up to $2,000 with terms as long as 12 months. The old rule allowed credit unions to offer its members loans between $200 and $1000 and capped the terms at six months.

The NCUA’s goal is to increase the availability of payday loan alternatives, which have far lower interest rates than those offered by payday, auto title and other ...