Credit Unions
Who's Missing from the Payday Loan Debate?
Saturday's Washington Post carried an article with the hopeful headline "Credit Unions Slowly Fill Void as Payday Lenders Leave D.C." In January-before Ohio enacted its anti-payday lending law, before the Arkansas Supreme Court interpreted that state's laws to effectively ban payday lending-the District of Columbia capped interest rates on short-term loans at 24%. That meant that traditional payday lending was out of business.
While the article's headline was hopeful, what followed showed the difficulty these bans face. Credit unions are indeed trying to fill the gap, not just in the District, but nationally. And the Federal Deposit Insurance Corporation (FDIC) has a small-dollar loan pilot underway with 31 banks around the country (although none in the District).
