a payday that is traditional has every motivation which will make numerous pay day loans to this debtor to increase the profits of the union at the expense of the debtor
Furthermore, the PALs we rule eliminates the financial motivation for the FCU to encourage a debtor to obtain numerous PALs we loans by restricting the permissible charges that an FCU may charge that debtor up to a reasonable application charge.  The non-credit union lending that is payday model is based on repeated borrowings from an individual debtor of smaller buck amount with a high charges and associated fees. By restricting the range of permissible charges, the PALs we rule realigns financial incentives to encourage an FCU to deliver a PALs I loan being a path towards conventional lending options and service instead of as an independent revenue center for the credit union.
The Board understands that the PALs we rule covers suggested guidelines that, whenever exercised along with a PALs I loan, assist place credit union users in the path to mainstream products that are financial solutions.