Members line up at Virginia CUs to avoid payday-loan trap
HAMPTON ROADS, Va. (10/10/06)--Langley FCU members who are facing increased pressure from their payday loan commitments can turn to a dedicated staffer for assistance.
A year ago, the Hampton, Va., credit union moved staffer Kirk Adams from collections--where he worked to get members to pay off loans--to financial counseling. He now spends two to three hours per day with up to four members, trying to help them solve their financial problems.
At least 30 members are on his waiting list, which has included teachers, engineers, janitors and military personnel, he said (Daily Press Oct. 8).
The $1.13 billion asset credit union launched its QuickCash program after it noticed that members lined up on paydays to get funds to pay back loans from payday lenders.
President/CEO Jean Yokum said she hopes the program will build goodwill between the credit union and the member.
The program offers loans that must be paid back within 30 days. It costs the credit union more to process the loan than the $7.50 it charges on a $500 loan, Yokum noted.
Another credit union, 1st Advantage FCU, Newport News, Va., started its loan program about six months ago. The $425 million asset credit union serves a number of military personnel.
Adams said the general public makes up most of his clients. Housing costs, child care and prescriptions all are taking their toll on peoples' budgets, he noted.
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