ALEXANDRIA, Va. (July 29, 2015) – Each year, nearly 12 million people in the United States take out a payday loan, which can have higher interest rates and fees than other forms of credit, according to a new video released today by the National Credit Union Administration.
The video, “Understanding Payday Loans,” is available on NCUA’s YouTube channel (opens new window). The video explains how payday loans work and highlights important features of these loans that consumers should understand. The video also provides an overview of payday alternative loans available to members of federal credit unions that offer them under an NCUA regulation.
“By providing information about payday loans and alternatives to payday loans, we can help consumers make informed choices and avoid a potential cycle of debt and dependency,” NCUA Board Chairman Debbie Matz said. “NCUA’s payday alternative loan program seeks to meet borrowers’ short-term financial needs while promoting greater financial security in the long run.”
The video is part of NCUA’s Consumer Report series developed by the Office of Consumer Protection. NCUA supports credit unions and their members with financial literacy and consumer protection resources available at no charge on MyCreditUnion.gov (opens new window). NCUA also provides up-to-date financial education information on the agency’s YouTube (opens new window) channel, Facebook (opens new window) page and consumer Twitter (opens new window) feed.
Under the Federal Credit Union Act, promoting financial literacy is a core credit union mission. While credit unions serve the needs of their members and promote financial literacy within the communities they serve, NCUA works to reinforce credit union efforts, raise consumer awareness and increase access to credit union services. NCUA also participates in national financial literacy initiatives, including the Financial Literacy and Education Commission, an interagency group created by Congress to improve the nation’s financial literacy and education.