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StretchPay underwriting ops changes in effect
COLUMBUS, Ohio (9/18/09)--Changes have been made to StretchPay--a credit union salary advance alternative--to make it compliant with the federal Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009. As of Tuesday, StretchPay no longer is a 30-day, short-term loan product. It now is a short-term revolving loan with repayment due dates, ranging from 28 to 60 days, said the Ohio Credit Union league League (eLumination Newsletter Sept. 17). The changes were made to ensure that credit unions offering StetchPay are compliant with Regulation Z--Truth-in-Lending--which the Card Act amended in August. StretchPay was affected because it is an open-end loan product. “The operational change will grant participating credit unions an opportunity to continue offering their members a valuable service,” said Laura Busque, league outreach manager. StretchPay provides annual lines of credit to credit union members during budgeting emergencies. Participating members pay a $35 annual fee to access a $250 line of credit for 12 months at an 18% annual percentage rate or the state usury rate. “StretchPay would not nearly be the success it is today without the involvement of the National Credit Union Foundation's REAL Solutions program," said Doug Fecher, CEO of Wright-Patt CU in Fairborn, Ohio. "REAL Solutions gave StretchPay a voice in the national credit union community it could not have attained on its own.”
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