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CU System
PCUAs Better Choice saves consumers 3.2 million
HARRISBURG, Pa. (8/20/08)--Since launching in October 2006, Pennsylvania's payday loan-alternative program, Credit Union Better Choice, has saved consumers more than $3.2 million dollars in interest and fees. The Pennsylvania Credit Union Association (PCUA) reported its semi-annual figures for the program, which was developed with the Pennsylvania Treasury Department. Since the program began, 73 credit unions with 198 locations have agreed to offer the loans, with additional participants continuing to sign on. Of the participating credit unions, 66 made nearly 9,500 loans totaling more than $4.47 million. The average loan amount was $470.92. "The success of the Credit Union Better Choice program continues to indicate that Pennsylvanians need access to low-cost short-term loans," said Jim McCormack, PCUA president/CEO. "I'm pleased that credit unions are fulfilling that need in Pennsylvania and clearly demonstrating our mission of People Helping People." A typical $500 payday loan costs consumers $15 for every $100 borrowed for two weeks, or roughly $450 over 90 days. The same loan would cost Credit Union Better Choice borrowers about $42.50 for 90 days, plus it would put $50 in their savings account. The program also provides financial education to consumers. Pennsylvania consumers saved an average 80 cents in loan fees and costs for every dollar borrowed through Credit Union Better Choice. That translates to more than $3.2 million consumers saved. Borrowers also placed $447,327 into savings accounts for future needs. "At a time when high gas and food prices continue to strain budgets across the Commonwealth, Pennsylvanians who need quick access to funding should not have to worry about getting trapped in a predatory debt cycle," said Robin Wiessmann, state treasurer. Wiessman noted those using the Better Choice loans received "the short-term loan they need but also practical financial skills."
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