Oregon CUs' payday-loan ads gain more interest
SALEM, Ore. (10/10/06)--Credit unions are putting their payday-loan alternatives out in the public eye, and Oregon consumers are taking note.
This summer, the Department of Consumer and Business Services and the Credit Union Association of Oregon (CUAO) launched an ad campaign to promote credit unions' payday loans.
The keywords "payday loans" have been searched about 1,740 times since July on the department's website, which is about 16% of total searches, said department Communications Director Diane Childs (Statesman Journal Oct. 1).
More than 360 calls to the state's consumer information line have been specifically about credit unions' offerings.
First Tech CU in Beaverton began its payday loan program in 2004 to meet the demand from its 133,000 members. Members can take out a loan for a percentage of their paycheck, up to $500 for up to 30 days at 18% interest. The loan must be paid off by their next payroll date.
It has been promoting the program through lobby ads and direct mailings.
For members who can't cover the loan with the next paycheck, a tailored loan with monthly payments may be the next step, said Bob Corwin, executive vice president of the $1.5 billion asset credit union.
He said the credit union wants to work with members to help them learn behaviors that will keep them out of the payday-lending cycle.
About two dozen credit unions in Oregon offer payday loan alternatives. Their work in this field has drawn praise from Gov. Ted Kulongoski, who signed an interest rate cap into law this year.
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