Category: Credit Unions

  • Credit Unions discuss payday loans

    In an article title, “What if Payday Loans Go Away?”, Credit Unions discuss our industry.

    For example, Jim Blaine, CEO of the $18 billion State Employees’ Credit Union, headquartered in Raleigh, N.C., said he looks forward to the day when payday loans go away and that this may mean credit unions go back to doing more of the sorts of lending they used to do.

    Well Jim, why don’t you offer short term loans today, if you want to help people so much? I suspect that you have easier ways of making money off of people.

  • Nevada Federal is Out Of Payday Loan Business

    Nevada Federal had been offering a loan called AdvancePay, which charged an application fee up front.

    After receiving this letter from the National Credit Union Administration (NCUA) chairman, Michael Fryzel; Nevada Federal decided to stop offering their payday alternative product, even though they believed the product was cheaper than other alternatives.

    What I think happened is that the NCUA considers the application fee part of the finance charge. This makes their loan product above the 18% max APR ceiling allowable by an Federal Credit Union Act (FCUA).

    So why does the NCUA think that an application fee that is charged, regardless, of whether or not a loan is provided considered part of a finance charge?

  • Credit Unions competing with payday lenders

    Credit Unions offering some type of payday loan alternative is nothing new. What I think is worth sharing are the comments left on this article titled N. Texas credit unions plan to compete with payday lenders.

    rgvcowboyfan wrote on 7/2/2009 4:21:43 PM:
    Credit unions do not lend you if you have had a tough financial time in the past even though you may be working on improving your finances. Pay day loan companies do not look at your credit score, only at your current ability to pay.

    valtwin wrote on 7/2/2009 1:14:11 PM:
    Two totally different clienteles. The CUs will only be in competition amongst themselves.

    We provide payday loan software for many lenders, and I find payday lenders are much more leniant with, not to mention forgiving, of their customers. This goes a long way. Payday lenders are open to re-lending to customers that have been a late payers are delinquent in the past. I don’t think credit unions or banks are like that.

    The point is that you can make a cheaper product, but is it necessarily better?

  • Florida credit union offering 18% installment loan

    If you can make money at 18%, more power to you. Let’s not confuse a good intention with the actual result. I hope they make numbers available after a year.

    Family First Federal Credit Union has rolled out a new loan that will not
    deny an applicant based on their credit score.

    The Credit Rebuilder loan
    amount is up to $1,000 at 18% interest up to 12 months. Once the loan is paid
    off, the member can qualify for an additional $500 totaling $1,500 on all new
    loan requests. Applicants must be a member of the $169 million Family First FCU
    for at least three months, have direct deposit and be employed for a minimum of
    three months not including seasonal work.”



    Now, we’ve seen this before and it’s ironic that you never hear a follow up story. In Illinois, South Side Community Federal received a $50k subsidy from Chase bank. The end result? They never tell you. The do offer a PAL (payday alternative loan). Here’s the catch: If your credit score is under 650, you have to put up $250 in cash as collateral to get up to a $500 loan.

    You can read the full article in the Credit Union Times and get some commentary on Payday Pundit.

  • Credit Union payday loan alternatives

    It’s great that this credit union is offering a lower cost payday product. Let’s keep two things in mind: the money is being subsidized by a $20M investment by the state treasury. Also, 18% interest on $500 for 90 days is around $22. I don’t know where they get $42. They must be charging an additional fee on the loan.

    They also do not say who qualifies for the loan. This is an important part of the story.

    Here is the full article from Pittsburgh Channel 4.