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Texas league submits wild-card parity brief to state
FARMERS BRANCH, Texas (3/10/11)--The Texas Credit Union League (TCUL) submitted a supporting brief this week to keep parity between state-chartered and federally chartered credit unions in the state on payday loan alternative rates. Earlier, the Texas Credit Union Department (TCUD) filed a request for an attorney general opinion on a matter that relates specifically to loan rates for alternatives to payday loans, and what is permitted under law. State credit unions have an 18% rate cap in the Texas Credit Union Act. However, under parity laws, they could charge up to 28%, according to a recent National Credit Union Administration allowance, and other parts of the state finance code allow higher rates for short-term loans. The attorney general opinion committee will look at the legality of the matter and likely will issue an opinion by the end of July. TCUL filed a brief in support of the status quo wild-card parity provision with the attorney general on Monday, which was the deadline to submit briefs. “We want to preserve the wild-card provision to ensure parity between state and federal charters,” Buddy Gill, TCUL chief advocacy officer, told News Now. “State-chartered credit unions should be able to invoke the parity provision for anything a federal credit union can do. "Our bottom line on this is that prices for products and services should be determined by the credit union management and board members,” he added. “If alternatives to payday loans are capped at 18%, some credit unions would not be able to make them work--and then members would have to go to payday lenders.”


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