Apart from reconsidering the proposed treatment associated with limitation from the wide range of PAL loans in a rolling 6-month period, the Board is adopting the PALs II framework mainly as proposed into the PALs II NPRM. Certain requirements for PALs II loans is lay out in a unique paragraph regarding the NCUA’s basic financing rule, В§ 701.21()( that is c)(iv). The rule that is final an FCU to provide a PALs II loan to an associate for just about any quantity up to a optimum loan level of $2,000. The PALs II loan must carry a loan term of at the very least 1 with a maximum loan maturity of 12 months month. The FCU will make such that loan straight away upon the debtor developing account in the credit union. Nevertheless, an FCU might only provide one sort of PALs loan up to member at any moment. All the needs for the PALs I rule will continue steadily to connect with PALs II loans such as the prohibition against rollovers, the limitation regarding the range PALs loans that an FCU could make to a solitary debtor in a provided duration, additionally the requirement that all PALs II loan fully amortize throughout the life of the mortgage.
Also, the last guideline forbids an FCU from asking any overdraft or non-sufficient funds (NSF) charges associated with any PALs II loan re payment drawn against a debtor’s account. This consists of overdraft fees or NSF charges that the FCU could evaluate contrary to the debtor for spending products presented for re payment following the PALs II loan re payment produces a balance that is negative the debtor’s account. The Board has serious fairness concerns regarding this practice in connection with PAL loans given the unique characteristics of payday loan borrowers and the Board’s stated goal of putting individuals on a path to mainstream financial products and services as discussed below, while the Board believes that reasonable and proportional fees assessed in connection with an overdraft loan are appropriate in most cases to compensate an FCU for providing an important source of temporary liquidity to borrowers.