Payday Alternative Loans or PALs are a buzz word in the credit union industry.
Some credit unions are advertising a 0% APR on their PALs, but charging a 20% documentation fee.
“The 20% fee does not accurately reflect the costs of processing applications so the fee should be considered a finance charge under Reg Z and be included in calculating the APR. This would raise the APR above the 18% ceiling,” the agency wrote.
If this proves anything, it’s that you can’t make money below 36%. Read more at Credit Union Times.
