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Montana CUs offer alternatives to payday loans
BILLINGS, Mont. (12/23/08)--Montana credit unions are teaming up to offer payday alternative loans to the state’s consumers, the Montana Billings-Gazette reported Monday. The Montana Credit Union Network recently partnered with Rural Dynamics Inc. to create Montana Credit Unions for Community Development. The program was designed to help low-wealth and underserved residents, said Tracie Kenyon, president/CEO of the network. Nine credit unions in the state offer the service and each credit union can create its own guidelines. Missoula FCU is offering 30-day loans up to $500 with a 12% interest rate. Application fees are $10. Park Side FCU, Whitefish, created a program that requires participants to take a financial stability class so they can open checking accounts and receive low-interest loans up to $300. Credit unions aren’t looking to profit from the loans, Kenyon said. They hope that the members using the payday loan alternatives will use other services as well. Many don’t realize that there are alternatives to payday loans. Credit unions need to help their members and consumers fill those needs, she added. Montana is seeking a 36% cap on the interest payday lenders charge, the newspaper said. Ninety percent of payday lending revenues are from fees charged to borrowers, according to the Center for Responsible Lending, the newspaper noted.
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