Bill Permits Payday Alternative

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Washington Gov. Gary Locke signed a bill into that gives Washington financial institutions parity to national banks and allows all state-charted credit unions to charge interest rates at an amount equal to the interest rate that a national bank, located anywhere in the U.S., could charge a Washington consumer. In short, the bill allows credit unions here to provide an alternative to payday lenders.

"Substitute House Bill 1759 allows state- charted credit unions to invoke most favored lending status and gives them the flexibility to charge rates appropriate to loan risk," said Stacy Augustine, SVP-Policy and Public Affairs for the Washington league. "That might not have been possible with the 18% interest rate cap."

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