SIOUX FALLS, S.D. (1/4/08)--Three Sioux Falls credit unions are emphasizing small-dollar loans to compete against payday lenders. In light of the prevalence of payday loans, credit unions need to market small-dollar short-term loans--which have traditionally been an earmark of credit unions--and also educate underserved segments of the population about the loans, said Tony Richards, president/CEO of the Mid-America Credit Union Association, the association for credit unions in North Dakota and South Dakota (Sioux Falls Business Journal Jan. 2). The $107.3 million asset Sioux Falls FCU informs it members about the availability of small-dollar loans, but needs to increase its education of nonmembers, Kevin Kavanaugh, vice president of marketing at Sioux Falls FCU, told the newspaper. While discussing ways to better reach nonmembers, Kavanaugh said it’s difficult to compete with payday lending vendors who seem to be on almost every street corner, because convenience is paramount to many consumers. In the past 18 months more members of Sioux Empire FCU--a $53.7 million asset institution--have obtained small-dollar loans and lines of credit, according to Tim Ingalls, Sioux Empire vice president. Although the amount members can borrow is largely determined by their needs, the credit union requires a $75 minimum monthly repayment term. Also, if Sioux Empire members successfully complete the Sioux Empire Housing Partnership’s Credit When Credit Is Due program, which teaches finance and credit basics, they are refunded the cost of the class. The $26.3 million asset Sioux Falls Bell FCU recently launched its Fresh Start program, which allows members to recover from their financial missteps. The program is a better way of handling finances for young and old members in the long term, as opposed to a quick fix such as a payday loan, said Sioux Falls Bell President Barb Erb.