PROVIDENCE -- First Rate Credit Union is the last place you want to apply for a loan. That's because it doesn't exist -- at least as far as state and national banking officials can tell.
The Rhode Island Department of Business Regulation issued a warning this week to consumers regarding an advertisement for the business that one of its field examiners spotted in the Sept. 30 edition of The Times newspaper of Pawtucket. The ad suggests that the credit union can help people with credit counseling and offers automobile loans, personal loans, mortgages and debt consolidation. Someone who responds to the ad, or calls a toll-free number, may receive what looks like a valid loan application that requests personal and financial information.
But the state agency and the National Credit Union Administration, the federal agency responsible for regulating credit unions, say First Rate Credit Union isn't chartered to do business.
While no one has complained to the Department of Business Regulation about First Rate, said Steven L. Cayouette, the state's chief bank examiner, the presumption is that the information turned over by consumers would be used to steal their money.
Similar ads have appeared in newspapers in California, Colorado, Iowa, Missouri, Ohio, Pennsylvania and Washington state, according to DBR.
The ad seen by the state field examiner continued to run in The Times this month, Cayouette said, but he added that The Times yesterday assured the agency that the ad had been pulled. Cayouette said he is unsure whether the ad had run in other Rhode Island newspapers.
The National Credit Union Administration has issued a national alert regarding the ads, and the state sent a cease-and-desist order on Monday to a Middletown, N.Y., address that one of its investigators tied to First Rate.
Cayouette said whoever placed the ad could face a variety of state and federal charges, depending on whether any loan activity took place or any fees were paid by people applying for loans or other services.
