If you want to set up a subprime loan shop (which it seems he did) just do it. Don't hide it as a community benefit
He wanted to offer non-predatory lower interest loans to higher risk clients, in concert with banking services that are difficult to provide to higher risk immigrant clients like checking and savings accounts and debit cards.
But the NCUA wouldn't allow him to set interest rates lower or offer checking/debit accounts.
That indicates that those rates aren't actually predatory at all, but required in order to defend against default.
Which really isn't all that surprising: in the case of payday loans and such, there are many operators, and anyone who could lessen his profit-per-loan could very easily snap up a great number of customers, increasing his net profit. That no-one has done this indicates either collusion or that the rates are fair.
sub prime lending then?
What many people seem to think of is the high interest rates, unfavorable terms and other things which push subprime loans into the predatory loan category. It's entirely possible (though apparently hard here, with the restrictions on rates they could provide) to offer non-predatory subprime loans.
If you are making loans to high risk clients, this is predatory lending. There's a reason they are high-risk: they are less likely to be able to pay the loans, or have demonstrated prior poor handling of debt. Don't be misled by "low interest" either: the "predatory lenders" in the last housing bubble were not for the most part charging exorbitant interest rates, rather they were lending far too much money to people with almost no qualifications.
If you make credit easy to get for people who can't handle it, they will end up bankrupt and the creditors will end up holding the bag.
I'm not sure it's viable or sustainable, but it is a noble goal, at least.
> If you are making loans to high risk clients, this is predatory lending.
What I was specifically replying to. High risk loans are not predatory loans. Predatory loans are high risk, high interest, unfavorable terms (short repayment periods, high-value collateral for low-value loans, aggressive collection tactics, etc.). We have to be clear when we talk about a topic to not mix the terms in a way that skews our discussion from the actual circumstances. That way lies miscommunication and misrepresentation of those involved.