More Washington CUs offer payday lending option
SPOKANE, Wash. (3/17/05)--Competition from credit unions--not legislation--may be what ultimately drives down the fees and rates offered by payday lenders in Washington state.
Three of the state's credit unions--Global CU, Spokane; Washington State Employees CU, Olympia; and Harborstone CU, Tacoma--already have adopted payday-lending programs or have subsidiaries that offer them. Another two credit unions in Spokane, Numerica CU and Spokane City CU, are considering such programs (Journal of Business Spokane Feb. 24).
Washington State Employees CU Service Co. administers payday lending for about 15 credit unions across the state.
The impact of credit unions' efforts to serve their members with these loans is being felt by payday lenders. Credit unions already have hurt revenues for Moneytree Inc., said its President/CEO Dennis Bassford.
Moneytree operates 102 payday-lending branches in six states with more than 50 locations in Washington. Bassford said the company is feeling the pressure of more locations and increased competition, particularly in Spokane, from credit unions.
Global CU's subsidiary mYday made $1.3 million in payday loans in 2004, not to make money but to offer people another choice and to do it better, said Mary Starkey, vice president of operations and chief operating officer for the $279 million asset credit union.
Helping members stay out of the high-cost loan cycle and offering them a chance to become more financially responsible have driven credit unions to offer the loans.
State Sen. Darlene Fairley (D-Lake Forest Park) is a critic of payday lenders but acknowledges there is a need for the service. There are good actors and bad actors in it, she said, adding that credit unions will help shake out some of the bad actors.
| Resource Links | |
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CUNA Lending Council white paper: Lending to Low-Income Members & Underserved Communities |
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Statement Stuffer: Payday Loans: The Hard Truth About Some 'Easy' Money |
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