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February 19, 2007
THEY EXPECT ALL OF THEIR CUSTOMERS TO EVENTUALLY DEFAULT!?!?!?!?!?!? Payday lending is right up there when it predatory lending practices, and the idea that it may actually increase a household’s welfare is just their attempt to spin as more and more (deserved) attention gets focused on their underhanded tactics. Their pheonomal growth rate is depressing, and it only reinforces that there are people out there who need us to help them. If we can find a way get those people into a credit union, we might be able to do something about our stagnant member growth.
Our credit union, MCECU from California offers a Payday Loan Product which has been received very well by our members. Our program is helping those members that are unable to get a loan elsewhere. We assist our members when possible to get out of this cycle by offering a small unsecured loan once our history with them has shown positive improvement in their financial position. More credit unions should offer the product.
I beleive, just like the people who left the two previous entries, that Payday loans are not good for the consumer, but I also beleive in the free market and these Payday Lenders are collectively successful because they are addressing a need or desire in the market. I just came from a meeting of my fellow CU marketers and not one of them had a payday alternative. We need to offer a payday loan alternative that looks and smells like the one the Payday Lenders offer, but is friendlier to the member. I don't know what the FRB of NY was thinking, but people are activly getting these products. If we are going to change actions, we need to change attitudes. We need to be noticed first, and we can do that by being as relevant as possible in our memebrs' and potential members' lives. Payday Lender users won't go for signature loans or secured cards right now. For whatever reason, they need the money now. Let's bring them into the fold first and then show them there is a better way.
It's become apparent that the payday lending stores are definitely filling a need that our CU members or potential members are meeting by visiting a payday loan store. It only makes sense for CU's to offer a payday loan type product.
Our CEO (Ed Speed of TDECU - Lake Jackson, Texas) has been deligently forwarding this information to us (and I do enjoy such articles). It certainly verifies what I have suspected all along regarding the "predatory tactics" of such businesses. Regards, Peggy Miltenberger, 1st Chairperson, TDECU
Payday lending is predatory. At best, it is a group of people who are taking advantage of other people who are not as economically fortunate as other people. They can call it what they want interest or "fees" ... but in the end substance over form will always rule. Most of the people who are lured to this practice have no voice in America. Not only are we the land of opportunity we are also a country of exploitation. Are we not better than this?
Which credit union leads in income per e...
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